Refinancing a Conventional Mortgage

Whether you’re buying your first home or refinancing your existing home, there are many options available to you. These include: Private mortgage insurance, refinancing, and minimum down payment requirements. There are also other credit score and loan amount requirements that must be met.


Minimum Down Payment

Buying a home with a conventional mortgage may sound like an expensive idea, but there are ways to get into the housing market with a low down payment. A home can be purchased with a down payment as low as three percent. Depending on your financial situation, you can choose to make a down payment that is even lower.

See How Easy it is to Get Your Custom Rate!
Watch Now

The amount you must put down depends on your credit score and your loan-to-value ratio. The higher your credit score, the lower your mortgage interest rate will be.

Most lenders require a down payment of five percent. However, some loans, such as VA and USDA loans, offer 0% down payments.

In order to qualify for a conventional loan, you’ll need to document your income and debt for at least the past two years. You will also need to pass an appraisal. The appraisal will provide an unbiased opinion of the value of the home. If you have trouble qualifying for a conventional loan, you can buy a house with a government-backed loan program.

See How Easy it is to Get Your Custom Rate!
Watch Now

Credit Score Requirements

Getting approved for a conventional mortgage involves more than just having a good credit score. It’s also about your income and debt-to-income ratio. If your DTI is higher than 36%, you might have trouble qualifying for a conventional loan. If you’re on the border of qualifying, shop around.

In terms of credit scores, lenders typically require a score of 620 or above. If your score is below 620, you might have to put more money down, or pay PMI (private mortgage insurance). Having a high credit score will get you a better interest rate and lower monthly payments.

See How Easy it is to Get Your Custom Rate!
Watch Now

The maximum amount you can borrow for a conventional loan depends on the type of loan you choose. For a fixed-rate conventional loan, you can borrow up to $647,200. However, in some high-cost areas, the limit is higher. For a jumbo loan, you may need to put down more money.

For the best mortgage rates, you’ll want to have a score of at least 720. You’ll also need a down payment of at least three percent.

See How Easy it is to Get Your Custom Rate!
Watch Now

Private Mortgage Insurance

Getting a conventional mortgage may mean you need to pay private mortgage insurance. The insurance is necessary to protect the lender from any losses they might face if you default on your loan.

The premium for private mortgage insurance is usually between 0.3 and 1.5 percent of the loan amount, and can be paid either up front or as part of your monthly payment. If you want to avoid paying PMI, you should try to get a conventional loan with a loan to value ratio of 80% or higher.

When it comes to private mortgage insurance, there are many different options to choose from. Some of these options include borrower-paid mortgage insurance, split-premium mortgage insurance, and single-premium mortgage insurance. The best option is to compare offers from at least three lenders. The cost of these offers will vary depending on your location, but you should be able to find a great deal.

Although you’re probably not going to see big savings with a private mortgage insurance plan, you can still get a better rate if you shop around. This can help you achieve your goal of becoming a homeowner.

Refinancing Options

Whether you’re looking for a new home, a second property, or want to lower your mortgage payment, refinancing options for conventional mortgages offer many advantages. These loans are backed by Fannie Mae and Freddie Mac, and can be a great way to make your home more affordable.

In addition to being flexible, these loans allow for refinancing with less than 20% equity. That’s why they’re so popular. If you’re looking to reduce your monthly payments, it’s important to consider all your refinancing options.

There are two main types of conventional home loans. The first type is an adjustable rate mortgage, or ARM. This type of mortgage features a fixed interest rate for the first five years, and then adjusts annually after that.

The second type of loan is a fixed-rate mortgage. This is ideal for homeowners who plan to pay off their mortgage in a few years.

These mortgages are insured by the Federal Housing Administration (FHA). You will have to make a down payment of at least 10%. But, it’s not necessary to have a perfect credit score to qualify for an FHA loan.