A conventional loan is a mortgage that is not guaranteed or insured by any government agency, including the Federal Housing Administration (FHA), the Farmers Home Administration (FmHA) and the Department of Veterans Affairs (VA). It is typically fixed in its terms and rate.
Conventional loans have great rates, lower costs, and flexibility when it comes to buying a home. About 60% of all mortgage applicants choose a conventional loan. You can use a conventional loan to buy a primary residence, second home, or investment property. They are available in fixed rates, adjustable rates (ARMs), and offer many loan terms usually from 10 to 30 years. The down payment for a conventional loan can be as low as 3%.
Here’s a list of Income and Asset Documentation you will most likely need when applying for a conventional loan:
- 60 days of bank statements
- 30 days of pay stubs
- 2 years tax returns if self employed or have rental properties or non-salary income (retirement, pension, etc.)
- 2 years W2s
- Social security, retirement, and/or pension award letters and 2 years 1099’s
- Rental agreements for any investment properties owned
Here are properties eligible for conventional financing:
- Single family homes (Detached)
- PUDS, or Planned Unit Developments
- 2-, 3-, and 4-unit properties
- Manufactured homes
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