If you’re thinking about buying a new home, you may have to take out a mortgage loan in order to finance the costs. Though there are many different loans to choose from, you’ll come to find that, most times, a conventional loan works best.
At Rocky Mountain Mortgage Company, located in El Paso, TX, we offer a handful of services for upcoming homeowners, including conventional loans. We have been a trusted lender in the southwest for over 35 years and can guarantee you’ll be able to finance your dream home with us. For a free consultation, give us a call at (915) 593-3111 or contact us online today!
Conventional Loans in a Nutshell
A conventional loan in El Paso has strict guidelines for homebuyers to follow; they also have strict credit requirements compared to government-issued loans. Like with any loan, you need to meet a designated number of requirements before the loan can be issued. Read below for a list of conventional loan requirements.
- Down Payment- The down payment requirement depends on your financial situation and the type of loan you’re seeking.
- If you’re not a first-time buyer, you’re getting an adjustable rate mortgage, or you’re making less than the median income in your area, your down payment is 5%.
- If this is your second home, you’ll have to put down 10%.
- If the house is not a single-family home, you’ll be required to put down 15%.
If you want to know how your down payment will affect your future monthly payments, feel free to use our loan calculator.
- Private Mortgage Insurance (PMI)- If you have to put down less than 20% on your conventional loan, you will need to pay for PMI. PMI is typically paid through your monthly mortgage payment. However, you can choose a higher interest rate or pay it in their closing costs. Once you reach 22% equity on your loan, your lender will remove the PMI from your loan.
- Credit Score- Once you send in your application, your lender will review your credit score to see if you qualify. You will need a score of at least 620 to move forward.
- Debt-to-Income Ratio (DTI)- Your DTI shows how much of your income goes to debt each month. With a 50% or lower DTI, you can be approved.
- A great way to keep your bills organized is to use a mortgage payment calculator.
- Loan Amount- In 2023, the loan limit for a single-family home is $726,200. However, if you live in a high-cost state, the loan limit is set higher. The El Paso conventional loan must fall within the limits to be approved.
Conventional Loan Lenders in El Paso
Here at Rocky Mountain Mortgage Company in El Paso, we have extensive financing options, great rates, and fast approval times. Our El Paso-based team has the experience to help you through your conventional loan. Call (915) 593-3111 to get started.
