Conventional Loan Down Payment Requirements
Many people mistakenly think they need a 20% down payment for conventional loans. While it’s a nice goal, it’s not required. We work with lenders that allow down payments as low as 3% – 5% of the sales price. This means you may be able to buy a home sooner than you thought.
If you qualify for a loan with a higher loan-to-value ratio than 80%, you’ll pay Private Mortgage Insurance or PMI. While PMI does increase your mortgage payment, it helps you secure a loan with a low down payment.
We’ll walk you through the process; explain how it affects your loan; and more importantly, when you can get rid of PMI.
Qualifying for 15 and 30-year Fixed Mortgages in Louisiana
You may have heard that conventional loans have strict requirements. While they are a little tougher than government loans, such as FHA and VA loans, they are still flexible:
- Minimum Credit Score of 620 (varies by lender)
- Maximum 28% housing ratio
- Maximum 36% total debt ratio
- Stable income/employment for two years
- No recent bankruptcies or foreclosures
We’ll walk you through each step to determine if you are eligible for a conventional loan.
Louisiana Conventional Loan Properties
Conventional loans are available on just about any property type including single-family homes, townhomes, condos, and manufactured homes. Unlike the government-backed loans, you can use conventional loans on any of the following:
- Primary home
- Vacation home
- Investment home
Just keep in mind, if you have a mortgage on your primary residence, you’re debt-to-income ratio must align with the lender requirements using both mortgages.
The Difference Between the 15 and 30-Year Terms
Conventional loans offer the choice between loan terms. First-time homebuyers, for example, typically stick with the 30-year fixed mortgage in Louisiana. Spreading the payments out over 30 years makes the payment lower. It also makes it easier to meet the conventional loan debt-ratio requirements.
But, the 15-year fixed mortgage in Louisiana offers the chance to own your home in half the time. With a 15-year loan, you’ll enjoy lower interest rates. You’ll also build equity in the home faster since you’ll pay the principal down faster.
Conventional loans are an option for many people that don’t even realize it. Let us help you understand how the loans work and see if you qualify. We have a variety of loan options available to help you find the loan for your dream home. We’ll help you choose between the 15-year fixed mortgage in Louisiana or the 30-year term.
How to Get a Conventional Loan In Louisiana
In order to get a conventional loan you need to make sure you meet all of the requirements. The best way to get started is to speak with a loan expert who can answer all of your questions.
Talking to an expert will help you:
- Know what you qualify for
- See what your interest rate will be
- Find the right budget that fits your monthly payment
- Answer all of your home buying questions.
If you are ready to get started just click get qualified below.