Conventional Mortgages
Williamsport Conventional Mortgages
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ABOUT
Principle Home Mortgage works with some of the best lending banks with the best rates so that we may offer our clients in Williamsport, PA and the Lycoming County region a great opportunity on conventional mortgage products. The conventional mortgage product is most different from other loan products in how mortgage insurance is structured. If you have a 20% down payment in a forward purchase transaction, or 20% equity in a refinance transaction, a conventional mortgage will not need mortgage insurance. With less than 20% down, clients can generally expect conventional mortgages to have lower mortgage insurance requirements than FHA products with no upfront mortgage insurance premium. When purchasing a home, conventional mortgages allows for seller assist, but the down payment amount does affect the maximum percentage. Principle Home Mortgage is always happy to discuss your scenario and what mortgage product best suits your needs, whether it’s a conventional loan, FHA, VA, or USDA.
PRODUCT HIGHLIGHTS
- Seller Assist: A low down payment of 5% allows for to 3%; A 10% or more down payment allows for up to 6%
- Agency: No agency regulates conventional mortgages, but they are underwritten to FANNIE MAE or FREDDIT MAC guidelines
- Max Loan-to-Value: 97%
- PMI: Between 0.5% and 1% of the loan value but varies based on several factors
- Max Income: No maximum income limitations
- DTI Requirement: 45% typically but varies by lending bank and may be higher with an automated underwriting approval. (see link below for more information on automated underwriting)
- Credit Requirement: All FANNIE MAE or FREDDIE MAC loans require a 620 minimum credit score
- Down Payment Requirement: As low as 3%
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PRODUCT BENEFITS
- Mortgage insurance can be avoidable: Conventional mortgage loans do offer the ability to avoid mortgage insurance, unlike FHA or USDA programs. On conventional loans, mortgage insurance is called PMI, or private mortgage insurance. With a 20% down payment, you will not be required to have PMI. Less than 20% down payment for a home purchase means PMI will only be charged until the loan-to-value reached 78%.
- Low down payment options: Principle Home Mortgage has lenders that offer a 97% loan-to-value conventional loan program, or a low 3% down payment. Note that there is a difference between closing costs and down payment.
- Seller Assist is still an option: Even though conventional loans are different than government-backed loans, seller assist is still available. The allowable amount is based upon down payment.
- No Upfront Mortgage Insurance: VA loans require a ‘funding fee’ upfront, and FHA requires the borrower to pay UFMIP (upfront mortgage insurance premium). Even conventional mortgages requiring private mortgage insurance (PMI), do not require an upfront mortgage insurance premium.
HOW DO I APPLY?
Principle Home Mortgage will discuss with you the various loan programs available in Williamsport, PA and the Lycoming County region. We help our clients find the best mortgage product for their needs. To apply for a conventional loan, you will need 2 years tax returns and W2s, 2 months bank statements, 2 forms of ID, and 30 days of paystubs. If you are self-employed, these requirements will vary slightly. To determine if a conventional mortgage is your best mortgage solution, whether you want a low down payment, or hope to avoid mortgage insurance, reach out to Principle Home Mortgage at (814) 308-0959 to discuss your home financing needs.
RESOURCES
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