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Conventional Loans

What You Can Buy With A Convention Loan

This list of what you can buy with a conventional mortgage is quite straight forward.  You can buy anything that your lender is willing to finance as a mortgage with a mortgage loan. However, there are guidelines that most lenders follow.  Here is the list of types of properties that you can mortgage according to the guidelines: 1-4 family residences; modular homes; manufactured homes; planned unit developments; and, warrantable condominiums. The uses these properties can be any of the following (note: we are specifically excluding business uses from this list… If you have a business use, see you lender. primary residences; second homes; and, investment property. These guidelines are developed by the organizations such as the National Mortgage Association, Freddie […]

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Conventional Loan Down Payment And Interest

Conventional Loan Down Payment A conventional loan down payment is quite important from a lending institution perspective. This is because, they don’t have the “Full Faith And Credit Of The United States Of America” standing behind the loan.  They are absorbing the risk themselves and that changes things a lot. Lending institutions such as banks see the down payment as a part of their business plan.  It is what is called “risk mitigation.”  The way your lender looks at it is that the more money you put down, the less likely they will need to foreclose against your property. In your lenders viewpoint, someone with no money or a trivial amount of money in a property is likely to walk […]

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How To Qualify For A Conventional Loan

To qualify for a conventional loan you must conform to the lending practices and rules of the lender you apply to for the conventional mortgage loan.  The lender makes the rules.  As long as they are within the law in their state they can do pretty much what they want. However, market place competition will generally put them in the neighborhood of some generally excepted guidelines. Normally, when you apply for a loan, lenders are interested in three things: They want to know about both your income and expenses. There are generally accepted ratios that many lenders use to determine if they are interested in giving you a loan… More on that later. What is your credit score.  Your credit […]

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What Is A Conventional Loan?

A conventional loan is any loan that is is not guaranteed or insured by a government.  In the United States of America this generally means the Federal government.  Most state and local governments don’t have guarantee or insurance programs. Categories Of Conventional Loans There are two categories of conventional loans: Conforming – This is any loan which follows the guidelines laid out by Fannie Mae or Freddie Mac.  Fannie Mae and Freddie Mac are “quasi-governmental” corporations which, while legally public companies, are actually setup and operated by law or administrative rules established by law. Non-Conforming – This is any loan which does not meet Fannie Mae or Freddie Mac guidelines. There is no law that I am aware of that […]

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