Houston Conventional Home Loans

If you’re looking to finance a home purchase but are not eligible for government-insured home loans, you’ll likely need a conventional loan. A conventional home loan is a primary source of financing for people with decent credit scores, stable income and employment, and good credit history. These loans don’t have government backing like FHA, USDA, and VA loans. 

Capital Home Mortgage offers conventional loans in Houston for both new and repeat homebuyers. 

To learn more about our conventional home loan program, contact our loan specialists to discuss this mortgage product with you in greater detail.

Conventional Loan Requirements

Since conventional loans aren’t government-insured, we require higher qualification requirements to compensate for the risks of borrowing. If you can’t tick off most of the requirements below, we recommend choosing a government-insured loan program like FHA or USDA.

1) Proof of Income

Your capacity to pay monthly mortgage payments depends on your income. We accept employed and self-employed individuals as long as the following documents are presented:

• Most recent thirty days of pay stubs;
• Last two years of W-2 statements;
• Two years of personal and business tax returns, if self-employed;
• Previous two years’ 1099s;
• Year-to-date Profit and Loss Statement, if self-employed;
• Social security benefits letter, if applicable;
• Copy of final divorce decree, if applicable.

If you have other sources of income, we might require you to submit additional proof or documentation.

2) Employment Verification

For employed applicants, we might call your employers to verify your employment history and salary. Self-employed applicants will be required to submit additional paperwork that supports their business and income. A letter from the CPA who prepared the last two years’ tax returns may be necessary.

3) Assets & Reserves

Bank statements of your savings, checking, or investment account are requirements to prove that you have enough cash for the down payment and closing costs. In a conventional loan, you will shoulder out-of-pocket expenses that you can’t refinance to the loan. We highly recommend that you set aside cash for closing costs or haggle with the seller of the house regarding who will shoulder closing costs. On top of the funds for closing, all borrowers must also show asset reserves.

All borrowers are required to provide the following asset documentation:

• Last two months’ bank statements;
• The most recent retirement account statement, 401k, IRA, etc.

4) Satisfactory Credit History 

Your credit score is an essential requirement in the loan application process. Regardless of how large you can put as a down payment, a low credit score may impact the success of your application. 

As a minimum requirement, the credit score for a conventional loan should be at least 620, but a higher score is preferred for higher chances of approval. If your credit score is below 620, we recommend considering FHA loans.

Conventional Loan Limits

Fannie Mae and Freddie Mac set loan limits to standardize mortgages in the United States. Every year, loan limits change. 

Get a Home Purchase Loan at Capital Home Mortgage in Houston

Please speak to our loan officers today about your Conventional home loan in Houston. Our commitment at Capital Home Mortgage is to provide the best mortgage service to clients. And since we are a direct mortgage lender, we can deliver a more streamlined loan process from application to funding. 

Give us a call at (281) 674-7372 to get started with a no-obligation quote.