Conventional Home Loan
Are you looking for a low cost loan with some great benefits for saving money over the life of your loan? A Bayside Financial Conventional Home Loan may be a perfect fit.
- Lower cost than many government programs that require mortgage insurance
- Available for primary, second homes, investment properties
- Choose a fixed-rate or adjustable rate mortgage (ARM)
- Wide range of down-payment options
What is a Conventional Loan?
A conventional mortgage is a loan that is not guaranteed or insured by any government agency. Conventional loans include fixed-term and fixed-rate mortgages, but not loans backed by the Federal Housing Administration or Department of Veterans Affairs. Mortgages not guaranteed or insured by these agencies are known as conventional mortgages. These mortgages adhere to Fannie Mae guidelines. Fannie Mae, or Federal National Mortgage Association, is a corporation created by the federal government that buys and sells conventional mortgages. It sets the maximum loan amount and requirements for borrowers. For most areas of the country the current conforming loan limit, set by government enterprises, is $484,350 and in certain High-Cost Areas it is $726,525.
Usually, a conventional mortgage is a 30-year fixed rate loan. That means it has a fixed interest rate for the 30 year term of the mortgage. Conventional mortgages also typically require at least a 20 percent down payment or equity in the property. Conventional mortgages can have better interest rates than non-conventional mortgages and can be a great option for those who have a 20 percent down payment or equity in the property. However, even if the borrower does not have a 20 percent down payment or equity in the property, it is still possible to get a mortgage. By putting less down and accepting a slightly higher interest rate, the borrower can still get financing through a conventional mortgage and avoid the high cost of Private Mortgage Insurance (PMI) which is required on all loans above 80% Loan To Value (LTV), by taking advantage of our Lender Paid Mortgage Insurance program (LPMI) that will go all the way up to 95% LTV.
Ask us about this cost effective program.
Mortgage Types and Benefits
Bayside Financial offers a variety of conventional loan options to help borrowers purchase their dream home. Borrowers with enough funds for a 20% down payment can avoid mortgage insurance immediately while others can have it removed with an appraisal after reaching an 80% Loan-to-Value (LTV). There is also added flexibility to accommodate multiple types of properties, including second homes and investment properties. Regardless of how you can benefit from a conventional loan, PennyMac will work with you to make sure all your options are in front of you.
- Avoid mortgage insurance with a 20% down payment
- Term options are more flexible and easier to customize and match to your financial needs
- They can be used for many types of properties, from single-family homes to condominiums
For homeowners looking to save on their current mortgage payments, Bayside Financial also offers conventional refinance loans. Refinancing into a conventional loan is a great way to get a great rate at a term that suits your financial goals. Best of all, you can refinance into a conventional loan from any other kind of loan.
- All you need is an 80% LTV to avoid mortgage insurance
- Flexible term options could enable you to save money without extending the length of your loan
Conventional Cash-Out Refinance
A Cash-Out Refinance Loan from Bayside Financial is a way to access the equity in your home to tackle things like home improvements, lingering debt or any other expenses that you need help managing. In some cases, you may also be able to lower your monthly interest rate as well. Bayside Financial offers a wide range of cash-out refinance options to suit any number of needs, including adjustable and fixed-rate loans in a variety of term lengths.
- Use cash from your equity for anything, including home improvements or paying off high-interest debt
- Manage your debts at the best possible rate
- Consolidate other debt from multiple sources, like auto loans and credit cards, into a single payment and simplify your finances
Many home buyers opt for a home loan insured by the Federal Housing Administration (FHA), often because of the minimal down payment and flexible financial requirements. These loans are a great way for first-time homebuyers to get financing but sometimes a transition to a conventional loan can make more sense after you’ve built equity. Refinancing into a Conventional loan can often lower your monthly payment by both lowering your rate and removing mortgage insurance. Even if you’re not lowering your rate, eliminating mortgage insurance alone could still save you both on your monthly bill and over the life of your loan.
- Get a lower interest rate and lower your monthly payments
- Reduce or remove your mortgage insurance payments
Who Is Eligible for a Conventional Loan?
While products like VA, USDA and FHA loans are structured to make home buying possible for a wider range of people, conventional loans have somewhat more stringent standards. Qualifying for a conventional loan generally requires the borrower to show an overall stronger financial profile to the lender in order to qualify for some of the unique benefits.
A few of the key eligibility requirements include:
- Good credit – Generally credit scores of 620 or higher depending on the transaction, though the FICO requirement may vary from lender to lender
- Minimum 3% down payment – While you may choose to pay as little as 3% down, an approximately 20% minimum down payment is required to eliminate the need for mortgage insurance
- Cash reserves – You should have at least two months cash reserves after closing to cover your loan costs
- Proof of income – You will need to show steady income to cover the cost of your loan and self-employed individuals will need to supply two years of tax returns
- Debt-to-income – Your debt-to-income ratio should be no more than 45%, but can go up to 50% in limited cases. This is the percentage of your monthly gross income that is paid out to recurring debts.
Why Choose Bayside Financial as Your Conventional Mortgage Lender?
Bayside Financial Loan Officers have earned a reputation for focusing on the unique needs of every customer. Whether they are first-time homebuyers interested in a conventional home loan or are looking to refinance their existing mortgage, our specialists are equipped to help borrowers through each and every step of the conventional mortgage process.
Bayside Financial is dedicated to fulfilling the dream of homeownership for everyone interested in taking the next step on a new property. We’re working every day to improve the experience of finding the right home loan for your unique needs and offering competitive rates on a wide range of products.
Interested to learn more about what Bayside Financial can do for you?