Mortgages 101 – Sorting out the Options, Part 2: Conventional Loans by Jennifer Prestwich Your North Suburban Denver REALTOR

When it comes to mortgages, there are a lot of options to sort out.  When I am working with clients, they often ask me about mortgage rates and down payments, and the answer can vary.

In Part 1 of the series, we examined FHA mortgages.  In Part 2, we will take a look at Conventional Mortgages, the lending criteria, and the Pros and Cons.  This is meant to be an overview – a licensed Loan Officer will help you examine all of the options more closely to help you determine the right choice for you.

Conventional Loans:

Minimum Down Payment: 5%, or 25% down for investment properties.

Mortgage Insurance: Required if your down payment is less than 20%. This premium is paid upfront OR monthly.

Minimum Credit Score: 620, however if your credit score is below 660, FHA may be a better alternative.

Ownership Types: Primary residence, Second home, or Investment properties.

Property Type: Singe Family, 2-4 Units, Townhomes, Condos.

Maximum Loan Amount: $417,000 for a single family home.  Keep in mind that this is the loan amount after your down payment.

Pros: Lower mortgage insurance premium thatn FHA, ability to put more down and avoid MI altogether, flexibility for different ownership types.

Cons: Higher rates than FHA, rates vary significantly based on credit score, property type, ownership, and down payment.  Other factors will affect rates – ask your Loan Officer.

Wondering whether you have enough down payment to live in your dream neighborhood?  Call me at 720-341-5235 to find out what’s available in Henderson, Thornton, Northglenn, Broomfield, and Westminster!

, , , , , , ,

No comments yet.

Leave a Reply