Conventional Loans

Conventional loans are loans that are not guaranteed or insured by the government. Mortgage Bankers, Banks or Savings and Loans normally fund conventional loans. They are traditionally originated to conform to FNMA or FHLMC standards. Although, Conventional Loans by definition have no boundaries as far as requirements, they normally meet the following standards.

LOAN TO VALUES:

Normally no more than 95% loan to value. STATED INCOME AND ASSET LOANS maximum loan to value 80%

CREDIT: 

Where FHA and VA are somewhat more understanding, Conventional loans require a higher standard of credit management. Conventional loans will require 4 years to have passed after a bankruptcy before granting credit whereas, FHA only requires 2 years. Credit is especially important when using our STATED INCOME AND ASSET LOANS.

EMPLOYMENT: 

Must be verifiable for at least 2 years steady employment. We do carry a full line of STATED INCOME AND ASSET loans, but your credit must be exceptional.

ASSETS: 

Assets are very important when using a conventional loan. Having cash reserves after close of escrow can be required. Where FHA allows a gift for any or all of the down payment and closing costs, conventional loans require an investment from the borrower when they apply for any loan over 80% loan to value. Loan amounts of 80% or less can have 100% gift funds.

PROPERTY VALUE:

The appraisal report is the single most important item in a conventional loan package. The appraiser must meet certain guidelines, be approved by the lender and be licensed by the State of California.