Am I a conventional loan borrower?
Am I a conventional loan borrower? - There is a standard profile for conventional loan borrowers. This is just a profile, and every loan is a case by case situation. But in general the conventional loan borrower will meet these criteria.
The conventional borrower has a low amount of debts in proportion to their income. This means that their debt-to-income ratio (DTI) is faily low (generally around 33%).
A conventional borrower will generally have a credit score of above 660. While there are many conventional borrowers that have lower credit scores, 660 is a nice solid number to provide you with a good chance at a conventional loan. Therefore, conventional borrowers will have very good credit, no late payment (at least over the last few years) and no Bankruptcies or Foreclosures over the course of the last few years.
Borrowers who generally qualify for these loans also have verifiable assets of at least 2 months piti.
Even if you do ot fit into conventional guidelines you may still qualify for conventional mortgage programs. Your mortgage broker can run you through an automated underwriting system and if approved on this system you will be eligible for conforming programs. If you are trying to secure financing over 80% then your PMI payments can vary depending on the level of approval you received from the system.
When you apply for a conventional loan. the lender will look for stable, verifiable employment history. You will need to provide informationa about at least your last 2 years of employment. Lenders like to see that you have been with one employer or at least in the same line of work for those 2 years with increasing income. Two different lines of work or schooling and work may be satisfactory if your mortgage loan officer presents it properly to the underwriter.
Your current employment will be verified at least twice before your loan closes. Often your current employer will be called on your closing date to verify that you are currently employed.
In general, conventional lenders are slower than non-prime lenders. This is due in part to the increased scrutiny when performing verifications.
If time is short and you must close quickly, ask your preferred Mortgage Professional about their fastest conventional lender, or consider going non-prime.
Your broker can reduce the amount of time it takes to underwrite your loan by obtaining an automated underwriting approval and paperless processing.