Conventional - A Deeper Dive

LTV's

Your new loan must be under 80% LTV to get cash out of your home; however you can tackle just the mortgage up to 95% LTV.

DTI's

Conventional loans will allow you to have a debt ratio of up to 50% - so your monthly obligations can be up to 50% of your gross income.

FICO's

While the famous HARP loans will allow scores into the 500's; standard Conventional loans require a 620 credit score and Jumbos a 700

Bankruptcy

A minimum of 2 years has to have passed since the discharge of a chapter 13 bankruptcy. Chapter 13 dismissals and Chapter 7 discharges require a 4 year waiting period.

Foreclosure

Conventional loans mandate that no less than 7 years pass from a home foreclosure prior to being qualified for new financing. 

Mortgage Lates

While there is no set standard regarding a maximum amount of mortgage lates, the general rule of thumb is no more than 2 lates in the last 12 months.

Understanding PMI

Payment Options

With conventional loans, as long as the amount of insurance required is obtained, you can have it paid however you would like - think if it like car insurance - you can pay your insurance company month-to-month, or you can pay part of it upfront and the rest monthly, or you can have the entire premium paid upfront (usually cheapest in the long-run).


Ask your mortgage expert about financing upfront premiums in your loan as well as PMI policies paid by the lender!

Breaking Down the Numbers

PMI premiums are  custom tailored to the loan itself. They base the costs off of loan purpose, FICO score, LTV, DTI, and even zip code! 


Reference the 250k purchase with 10% equity for a snapshot.


While an upfront PMI payment is generally cheapest long term, it's important to consider cost recuperation time.

Choose who you pay!

Unlike FHA where the mortgage insurance is issued by the government, private mortgage insurance comes from private companies, which gives you the ability to shop from one PMI company to the other to ensure you're getting the best price for your individual loan. 


RADIAN, ARCH MI, and MGIC are a few of the most popular companies to choose from

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