Conventional Loan Minimum Down Payment On Home Purchase
There are various minimum down payment requirement mortgage loan programs for home buyers. For those home buyers who do not want to pay a monthly mortgage insurance premium, the minimum down payment required is 20%. Conventional loans are different than FHA insured mortgage loans in the sense that the borrower’s credit scores play a significant role on what mortgage rates they get. For someone who wants a competitive mortgage rate on a conventional mortgage loan, their credit scores should be higher than 720 FICO. A mortgage loan borrower will and can qualify for a conventional mortgage loan with a FICO score as low as 620, however, they will probably get an extremely high mortgage rate. For those conventional mortgage loan borrower with lower credit scores, they should also compare and consider getting a FHA insured mortgage loan.
5% Minimum Down Payment Conventional Mortgage Loan Program
Most minimum down payment conventional loan programs are the 5% down payment program. To qualify for a minimum 5% down payment conventional mortgage loan, the mortgage loan borrower needs a minimum credit score of 640 FICO. There are a few mortgage lender that will consider approving a conventional mortgage loan with a credit score as low as 620 FICO but mortgage rates will be significantly higher. Conventional mortgage lenders want to see timely payments in the past 12 months, no bankruptcy in the past 4 years, and no foreclosure in the past 7 years are other requirements for 5% down payment conventional mortgage loan programs. Mortgage lenders will want to see three active credit tradelines that has been seasoned for at least 12 months and no overdrafts in the past 12 months. Rental verification for the past twelve months is a must. Rental verification is proven by providing cancelled checks for the past 12 months unless the home buyer has been renting their home from a licensed registered property management company. A letter from the property management company stating the tenant has paid their rental monthly payments timely for the past 12 months is sufficient.
3% Minimum Down Payment Conventional Mortgage Loan Program
There are many conventional mortgage lenders that only require a 3% down payment for conventional mortgage loans. However, to qualify for the 3% minimum down payment conventional mortgage loan program, the mortgage loan borrower needs a credit score of a minimum of 680 FICO. To qualify for the 3% minimum down payment conventional mortgage loan program, the mortgage lender wants to see a strong borrower with stable income, good payment history, good reserves, a minimum of 3 to 5 credit tradelines that has been seasoned for the past 12 months, rental verification, and no overdrafts in the past 12 months.
No Private Mortgage Insurance With The New 3% And 5% Minimum Down Payment Conventional Mortgage Loan Program
Mortgage insurance premium is required on all conventional mortgage loans that have more than an 80% loan to value. Conventional mortgage insurance premium is normally 0.67% of the mortgage balance paid annually in 12 monthly installments along with the monthly mortgage payment. However, many conventional mortgage lenders offer LPMI conventional loans, which are conventional loans that do not require the conventional mortgage loan borrower to pay monthly mortgage insurance premium. LPMI stands for Lender Paid Mortgage Insurance. For a slightly higher rate, the LPMI conventional mortgage loan program saves the conventional mortgage loan borrower the monthly mortgage insurance premium. If you are interest in 3% or 5% minimum down payment conventional mortgage loan program with no mortgage insurance premium, contact Gustan Cho Associates at www.gustancho.com . You can also apply online at www.gustancho.com by clicking the APPLY NOW icon on the top right of this website.