What is a conventional home loan?
A conventional home loan is your standard option for any loan amount under $647,200. Anything over that amount would fall under Jumbo Loans. The majority of loans originated in the country are backed by Fannie Mae or Freddie Mac. They set the underwriting standards on who is eligible. The majority of loans are backed by Fannie Mae, but it is important to also understand the Freddie Mac Guidelines. A cursory glance may have you thinking they offer the exact same terms, but there are some subtle nuances between the two entities.
Some conventional loan highlights are:
- Loan amounts up to $647,200
- As little as 3% down for first time home-buyers
- Competitive mortgage insurance for less than 20% down payment
- More flexible appraisal standards compared to government loans
- Less red tape on new construction
- One-TIme Close Construction options
- Renovation loans
- Cash-out refinances
How can we help you secure your conventional home loan in Whitefish, Kalispell or the greater Flathead Valley?
Conventional lending has some of the most robust options out there. There are many different programs that fall under the “conventional umbrella” and we understand them all.
Looking to buy a fixer-upper and need a cash injection to start the remodel? There is a conventional option for that. Ready to build a dream home from scratch? We offer that as well, and can help you navigate the intricacies of construction lending.
Freddie Mac has certain characteristics that make it easier to lend in a rural environment. Spotting these small guideline changes can mean the difference between a loan approval and a denial.
Self-Employed borrowers can sometimes have trouble getting qualified. Depending on the scenario, picking the wrong guideline standard (Fannie or Freddie) could also mean the difference between an approval and denial.
Interested in one-time close construction loans?
We realize that real estate in Montana, especially the Flathead Valley, is harder to find in specific price ranges. The great news is that Flathead Valley Mortgage now offers a one-time close construction loan option that acts just like a conventional mortgage upon completion of your new home construction. Please see our Montana construction loan page here for more information on these available loans.
Do I Qualify?
To determine if you qualify, lenders review your total monthly debt (proposed housing payment + regular monthly debt) as a percentage of your total gross monthly income. The acceptable percentage (DTI) will vary depending upon the specific loan program for which you apply.