Standard Purchase Mortgage Program
This program is for your basic purchase mortgage. Standard refers to the loans in this program all meeting a standard set of guidelines, which means the loan itself may be issued by several different lenders.
Indications - this program is a good choice for:
- Good Credit History: If you have a strong credit history and a high credit score, you may qualify for lower interest rates with a conventional mortgage. Generally, conventional loans offer favorable terms for borrowers with good credit.
- Down Payment Savings: If you have saved a substantial down payment, a conventional mortgage can be a good option. While some other loan types require lower down payments, a conventional loan with a higher down payment (e.g., 20% or more) may allow you to avoid private mortgage insurance (PMI) and potentially secure better terms.
- Stable Financial Situation: Conventional mortgages are suitable for borrowers with a stable financial situation and steady income. Lenders typically look for consistent employment and income when approving conventional loans.
- Property Type: Conventional loans are versatile and can be used to finance various property types, including primary residences, second homes, and investment properties. If you're looking to purchase a non-traditional property, a conventional mortgage may be a good fit.
- Financial Independence: Conventional loans do not have income restrictions imposed by government-backed loan programs. If you prefer a mortgage without income limitations and want greater control over your financing, a conventional mortgage may be a good choice.
- High Home Values: In areas with higher home values, conventional loans may be more suitable as they often have higher loan limits compared to some government-backed loans.
What are the benefits?
- Qualifying and Credit Standards: Standard Purchase Mortgages adhere to stricter guidelines set by the GSEs requiring a minimum of 620 credit score, stable employment, sufficient income, sufficient down payment, and in some cases reserves.
- Property Appraisal Issues: The property being financed must be appraised for an amount sufficient to cover the loan. If the appraisal comes in lower than the purchase price, it can lead to challenges in securing the mortgage.
- Timeline: Standard Purchase Mortgages typically take about 30 days from application to funding.
Typical Disqualifying Considerations?
- Quality Standard: In lending and have been for the past 30 years. They are an ideal product for anyone who wants to save money, and still knows they’re getting a fair deal.
- Stability: Typically, over the long haul, a borrower will save more money on a conventional loan than most other product offerings.
- Lower rates: Conventional mortgages often come with lower interest rates compared to other types of loans, such as FHA or VA loans. This can result in lower monthly payments and overall interest costs.
- Loan Term Preferences: Conventional mortgages offer flexibility in choosing loan terms. Whether you prefer a shorter-term loan for faster equity buildup or a longer-term loan for lower monthly payments, you can find options that align with your financial goals.
- Lower Costs with No Upfront Funding Fee: Unlike FHA and VA loans, conventional mortgages do not have upfront funding fees, which can be an added cost in other loan programs.
Alternative Programs
