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Conventional Loans

Any first mortgage other than FHA, VA or USDA is considered a conventional mortgage. Conventional loans may be conforming, non-conforming, or jumbo.

A conforming loan is a loan that conforms to Fannie Mae and Freddie Mac standards. Conforming loans are run through an automated underwriting system for instant approval.

Conforming Loan Key Facts

  • Qualifying criteria set by Fannie Mae and Freddie Mac
  • Loan amount can go up to $510,400
  • 3% minimum down payment
  • Credit score based pricing
  • Cash-out to 80%

A super conforming loan is only available in certain high-cost areas of the country. The loan amount can go all the way up to $765,600.

A lender-paid PMI loan is a no Private Mortgage Insurance option even if you have less than 20% equity in your home. This requires at least 5% equity, and can substantially lower your payment compared with the payment with PMI.

A non-conforming loan is any mortgage loan not secured by Fannie Mae or Freddie Mac.

Jumbo Loan

A jumbo mortgage is a home loan for an amount that exceeds conforming loan limits established by regulations. The conforming loan limit is $510,400 in most of the United States. Any conventional loan amount over the loan limit is considered to be a jumbo loan.

FAQs

Is a conventional loan my best option as opposed to FHA?

Maybe. Conventional financing is usually the better option for borrowers who have an excellent credit score and a sizeable down payment. There are several factors that can determine which is the better option. Contact a licensed loan originator at (800) 343-7315 or get a QUICK, FREE QUOTE to find out what’s best for you.

What does my house need to appraise for to avoid Private Mortgage Insurance?

Normally, you would borrow 80% of the appraisal value. So to figure how much your home would need to appraise for, take your desired loan amount and divide by 0.8 (for example, a desired loan amount of $120,000, divided by .8, would give you a $150,000 appraisal value).

Do I have to be at 80% to avoid monthly PMI?

No. For well-qualified borrowers, we can offer a no-PMI loan at a slightly higher interest rate. Essentially, the lender pays the PMI for you. This option would likely provide you with a lower payment. Call us at (800) 343-7315 or get a QUICK, FREE QUOTE to find out if you can qualify with no PMI!

Would I need to have an appraisal?

No. In certain circumstances, you can avoid an appraisal. For purchase loans and rate and term refinance loans, if the automated underwriting approves the loan without needing an appraisal, you are all set. Often, Home Affordable Refinance Program (HARP) refinances do not need an appraisal. Contact us today to see if you can purchase or refinance without an appraisal at (800) 343-7315 or start the process with a QUICK, FREE QUOTE.

What credit score would I need to qualify?

Generally, conforming loans require a minimum score of a 620. There are several other things that factor into the qualification process (such as income, assets, and credit history). We can quickly review and assess your credit score and other criteria for you.

If I do not have a 620 score, can I still qualify for a home loan with River City?

Yes. River City can offer FHA loans down to a 500 credit score. There are other factors needed to determine approval. Contact a licensed loan originator to discuss today at (800) 343-7315 or start the process online with a QUICK, FREE QUOTE.

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