Summit Lending - Mortgages & Refinancing, Serving all of Missouri, Kansas, Florida, & Arizona

CONVENTIONAL LOANS

The conventional loan experts at The Summit Lending Team will be with you step-by-step to walk you though the process. If there is any way that you may be eligible for a conventional loan, they will make it happen.

 

To learn more and see if meet conventional loan eligibility requirements, contact me @ 816.268.4025

Why such a big process to apply for a conventional loan?

A conventional loan is a home loan for individuals who have steady income, good credit and have funds available for a down payment. A conventional loan requires a 5% down payment. The Copeland Mortgage Team in Kansas City, MO helps buyers secure a conventional loan when purchasing property.

A conventional loan is not insured by the federal government (like USDAFHA and VA loans) and can be the preferred route to home financing for many home buyers and those purchasing investment property. Those who are purchasing their first homes, an additional home or even investment property often turn to a conventional loan.

Privately Backed

  • A conventional loan tends to follow Fannie Mae and Freddie Mac guidelines. Banks and other financial institutions issue a conventional loan – sometimes referred to as ‘regular loans.” A conventional loan is privately backed – unlike the government-issued FHA, VA and USDA loans. Because it’s the banks that put their “necks on the line,” guidelines and eligibility requirements tend to be more stringent than some of the federal loan programs.

  • While a conventional loan may have the strictest eligibility guidelines, they often prove to be the most advantageous loan option for those who qualify.

How do I qualify for a Conventional Loan?

Below are some of the general eligibility requirements of a conventional loan. Because each case is different, make sure to call us to determine if you qualify.
 

  • Credit scores - Guidelines will vary – please contact me for details.

  • Income requirements - Your mortgage payment cannot be more than 31% of your monthly gross income and your monthly debts (house, car, student loans, etc.) cannot exceed 45% of your monthly gross income.

  • Down payment - Most loans require between a 5% and 20% down payment. Mortgage insurance may be an option for those who cannot put down the full 20%.

  • Documentation - You’ll need to provide proof of your:

    • income stability

    • job history

    • residences from the past two years

    • income tax filings

    • paystubs

(This is just an initial list of paperwork that will need to be provided. Based on your income, assets, liabilities and profits more paperwork may be requested.)

Also, if you are not a U.S. citizen, residency or visa paperwork may be required.

What to Expect When Applying for a Conventional Loan

Typically, a conventional loan requires that borrowers have 5-20% of the home’s value as a down payment. Lenders who sell conventional loans review debt/income ratios and monthly housing costs. Also reviewed in the conventional loan application are credit scores, credit history and income over the past several years. Those who have gone through bankruptcies and foreclosures at least four years ago are eligible for a conventional loan, but must have excellent credit histories. Most loan programs review each applicant based on the Fannie Mae and Freddie Mac guidelines. The application process goes quicker than FHA loans or VA loans since the government isn’t involved in the application process. 

Typically, we will review the following items with you when applying for a conventional loan:

  • Your Employment (Is your income and employment steady?)

  • Down Payment (How much can you afford to put down?)

  • Credit History (Is your credit good, do you have late payments?)

In addition, we can discuss your options for mortgage insurance and setting up an escrow account, which will allow you to have your mortgage insurance, homeowners insurance and property taxes taken out as part of your monthly mortgage payment.