Conventional Loans San Diego
A conventional mortgage is a loan that is not guaranteed or insured by the federal government. Generally offering the best terms for borrowers with good to excellent credit and a reasonable down payment, these loans can have either adjustable interest rates (ARM) or fixed interest rates.
Requirements for a Conventional Loan
- Income: Your mortgage payments should not be higher than 31% of your monthly earnings. Programs are available to allow borrowers to qualify with higher ratios when they have strong compensating factors such as asset reserves or strong credit
- Credit Score: A good credit score is usually required but guidelines vary from lender to lender so get in touch with us to find out if you qualify.
- Down Payment: Most loans require a downpayment of 3%-20% of the total loan amount.
- Documentation: Required documentation includes items that show income and the ability to pay back the loan. This includes proof of job history, income stability, previous residency, pay stubs, income tax filings, and asset statements.
Conventional Loans Benefits
Conventional loans usually offer the most competitive rates and lowest costs to borrowers with good to excellent credit and there is typically room to negotiate some of the included loan fees. Since most lenders have the ability to cover the cost of mortgage insurance, there are typically more affordable payment options available when the downpayment or home equity is below 20%.