C2 Financial Corp - voted the #1 Mortgage Broker in the Nation by AIME
Your California Conventional Loan Specialist
Get hassle-free and quick financing solutions with the help of C2 Financial Corp – the best mortgage lenders in San Diego who will work hard to meet your needs.
What is A Conventional Loan?
Have you been searching for a home loan with no upfront mortgage insurance and fast unwriting? A conventional loan is one of the most popular types of mortgages in California and ideal for borrowers with good credit. Conventional loans require a 5% minimum down payment and define any type of mortgage that is not guaranteed or insured by the federal government.
Conventional mortgages can be easier to process because they don’t receive government backing like FHA or VA loans do. They offer fixed rates and terms, which makes them less complicated than some of the more complex government-backed programs on the market today.
Because there are several different sets of guidelines that fall under the umbrella of “conventional loans,” there’s no single set of requirements for borrowers. However, in general, conventional loans have stricter credit requirements than government-backed loans like FHA loans. In most cases, you’ll need a credit score of at least 620 and a debt-to-income ratio of 50% or less.
Conventional Mortgage Rates
Conventional mortgage rates in California change daily and are usually slightly lower than FHA loan interest rates and slightly higher than VA loan interest rates. The right type of loan for you depends on your own personal situation, but the best way to find out is to talk to Dennis today to find out the best rate available based on your own personal situation!
Conventional Loan types include:
Eligible properties for conventional financing
The requirements to qualify for a conventional mortgage in California are generally more specific than government-backed loans. For example, most conventional loans require a credit score that is no lower than 620, while 740 will provide a more affordable rate. There are three primary qualification categories that you need to keep in mind when applying for a conventional loan:
Private mortgage insurance (PMI)
Private mortgage insurance (PMI) is required when you put less than 20% down for a conventional loan in California. Unlike FHA mortgages, PMI doesn’t have to be carried with the loan forever – it can be removed after reaching 20% equity in the house.
For those with excellent credit, private mortgage insurance on conventional loans can cost less than FHA mortgage insurance premiums. Why? PMI is a risk-based insurance, like auto insurance, meaning the better your credit history and the lower your rate of delinquency, the lower your premiums. The lower the premium rates are for you, the smaller monthly payments you will have to make. So if you have a clean record with no delinquencies or late payments over the past year then this might be an option worth considering when looking into buying your next property!
how to apply for a conventional loan in California
We make it easy with six simple steps that are designed to achieve your financial goals.
We will walk you through the loan process, evaluate your needs, set expectations, and finally discuss the options that are best for you.
You will complete an application and submit any requested documents.
We will set up an inspection of your property and give you a copy of your appraisal once completed.
We then will review your property details, income, assets, and debts.
Once all conditions have been reviewed and are satisfied, your loan will then be approved.
You will sign your final loan documents, and then the loan will be available for funding.
conforming loan limit in california
The maximum amount you can borrow with a conventional loan in California depends on the type of conventional mortgage you choose — “conforming” or “non-conforming”. Conforming loans follow the terms and conditions set by Fannie Mae and Freddie Mac. Nonconforming loans don’t meet Fannie Mae or Freddie Mac guidelines, but they are also considered conventional.
Conventional loan california
Conventional Loan Required Documents
To apply for a conventional loan in California we will require documentation to substantiate your income and assets in order for you to get the best interest rates and terms. Some of the required documentation includes:
- 60 days of bank statements (all pages)
- 30 days of pay stubs
- 2 years tax returns if self-employed, have rental properties, or non-salary income (retirement, pension, etc.)
- 2 years W2s
- Social security, retirement and/or pension award letters, and 2 years’ 1099s
- Rental agreements for any investment properties currently owned
To find out more about the process of qualifying for a conventional home loan in California and how it affects you, contact Dennis from C2 Financial Corp today.