Conventional Loan
Conventional loans are popular mortgage financing options for qualified borrowers seeking to purchase or refinance a home in Texas. Unlike government-insured mortgage programs, conventional loans are not insured or guaranteed by a federal government agency and are subject to applicable lender and investor guidelines.
SPECIFICS
- Loan amount limits vary by loan program, property type, and location. Conforming loan limits are established annually by the Federal Housing Finance Agency (FHFA).
DOWN PAYMENT REQUIREMENTS
- Down payment requirements vary based on the loan program, property occupancy, and borrower qualifications.
- Options may be available for first-time and repeat homebuyers.
- Different down payment requirements may apply to primary residences, second homes, and investment properties.
- Eligible gift funds may be used toward certain down payment and closing cost requirements when applicable program guidelines are met.
CREDIT REQUIREMENTS
- Credit score and credit history requirements vary by loan program, borrower qualifications, and applicable lender and investor guidelines.
DEBT-TO-INCOME RATIOS / FIXED-RATE OPTIONS
- Debt-to-income requirements vary based on the loan program, borrower qualifications, and underwriting guidelines.
- A variety of fixed-rate mortgage options may be available depending on the loan program and borrower qualifications.
PRIOR CREDIT EVENT WAITING PERIODS
- Borrowers with a prior bankruptcy, foreclosure, short sale, or other significant credit event may still be eligible for conventional financing after applicable waiting periods.
- Waiting periods vary based on the type of credit event, the circumstances surrounding it, and applicable lender and investor guidelines.
- Shorter waiting periods may be available in certain circumstances when applicable program requirements are met.
OTHER IMPORTANT FACTS
- Closing costs, fees, and other loan expenses vary by transaction and loan program.
- Guidelines regarding the number of financed properties a borrower may own vary based on property occupancy, loan program, and investor requirements.
- Seller and other interested-party contributions toward eligible closing costs may be permitted, subject to applicable loan program and investor limits.
MORTGAGE INSURANCE
- Private mortgage insurance (PMI) may be required for certain conventional loans depending on the loan-to-value ratio, down payment, and applicable program requirements.
- PMI may be eligible for cancellation or automatic termination when applicable federal law, investor, and servicer requirements are met.
