College Station Conventional Home Loans

If you’ve been researching home loans in College Station, you’ve come across the Conventional mortgage. It’s the most common home loan program in the United States. 

This type of loan is not insured or backed by any government institution. Instead, it is made available through private lenders, such as mortgage companies, banks, and credit unions. However, government-sponsored corporations like the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) may guarantee conventional loans.

At Capital Home Mortgage, we provide Conventional home loans with terms tailored to your situation. We pride ourselves on delivering a straightforward loan application process with expert guidance every step of the way. 

Basic Loan Eligibility Requirements?

Since there is no government-backed security to the loan, conventional loans have stricter requirements. These include:

• Minimum Credit Score

You can qualify for a conventional loan if your credit score is 620. A higher credit score can give you lower interest rates and favorable terms. If your credit score is less than 620, consider going for an FHA home loan. 

• Debt-to-Income Ratio

The ideal debt-to-income ratio for a conventional loan should be between 36% to 43%. A high DTI might indicate that you have too much debt. However, having several tangible assets in your name may compensate for a high DTI.

• Down Payment

The minimum percentage of the down payment for conventional loans varies from 3% to 5%. However, while a low down payment is enticing, an initial down payment below 20% of the loan value will require you to get private mortgage insurance. These premiums will be part of your monthly amortization.

• Proof of Income

Aside from basic requirements, you will be asked to provide documents that show your income sources. Some of the commonly requested documents include:

1. 30 days of pay stubs;
2. Two years’ worth of W-2 statements;
3. Two years’ worth of income tax returns (self-employed or 1099 employee);
4. Year-to-date profit and loss statement (self-employed or 1099 employee).

• Assets

All borrowers must provide where the source of funds to close is coming from, plus reserves. A copy of your last two months’ bank statements and your most recent retirement account statements are required as proof of funds.

If a family member or relative is helping you with the down payment, you may submit a gift letter to indicate that the amount given is a donation, not a personal loan. The donor must also provide a copy of their bank statement to show where the funds are coming from.

• Identification

Lenders will require proof of identification; they will need a valid driver’s license or state-issued ID and a copy of your social security card or passport. 

Get A Conventional Home Loan In College Station

Capital Home Mortgage can help you secure a conventional home loan in College Station with competitive interest rates and low fees. Our status as direct mortgage lenders has put us in the best position to provide a hassle-free loan process with quick approvals. 

Let us help make your dream of homeownership in College Station a reality today. Contact us at (979) 393-0049 to get started with a no-obligation quote.