Tampa Conventional loans are ( also know as “conforming” loans) are basically mortgages generally $417,000 or less for a single-family home. Conforming loan limits can be higher in certain parts of the country – south Florida as an example. Conventional loan, just like all other mortgage programs have established guidelines for borrower credit scores, income requirements and minimum down payments. For example, most conventional loans in Tampa -St.Petersburg require somewhere between 5 -20% down payment. Only borrowers with higher credit scores (680+) can expect to qualify for max 95%+ loan to value financing.
Conventional loans can be conforming or nonconforming. Loans above the lending limits set by Fannie Mae and Freddie Mac are called nonconforming or jumbo loans. Most conventional mortgages have either fixed or adjustable interest rates – ARM. Typical fixed interest rate loans have a term of 15 or 30 years. A shorter term loan usually results in a lower interest rate. Adjustable-rate mortgages, or ARMs, fluctuate once their adjustment period starts in relation to the rate of a standard financial index, such as the LIBOR. Monthly payments can go up or down accordingly depending on the markets.
Conventional Mortgage Required Down Payments:
A common misconception is many applicants think that 20% down is the only option when buying a home in Hillsborough /Pinellas County. As of 2015, the current minimum down payment for a Fannie Mae loan is now as little as 3% with certain lenders. These new policy changes loosened mortgage purchase guidelines to encourage lenders to offer mortgages to more borrowers, even those with less than perfect credit. In most cases borrowers can even avoid paying expensive monthly PMI (Private Mortgage Insurance) with certain lenders thanks to LPMI (lender paid mortgage insurance) loans. Generally this consists of a slight increase in your interest rate, but results in a significantly lower monthly payment. Additionally, with this option you can roll the closing costs into your offer and have the seller contribute towards them or ask the Lender to offer you an option in which they pick up the tab on the closing costs. This will reduce the money needed by the borrower to just the down payment contribution. A buyer can qualify for all these options with less than perfect credit.
The 3% down options are restricted to buying a primary residence and single family home with a conventional mortgage. Some of the guidelines for the 3% down mortgage program include:
- Terms of up to 30 years
- No income caps
- No Class and homebuyer counseling is not required
- Down payment and reserves can be a gift from family, etc
- Purchase transactions require at least one homebuyer to be a First Time Home-buyer (FTB) – which is defined as not having ownership in a property at any time within the lat 3 years
These rules also include a limit on the amount of loan money will guarantee, known as the “conforming loan limit.” Loans that are larger than these loan limits are known as non-conforming or “jumbo” loans. Jumbo loans are not guaranteed by the GSEs, so they may have higher interest rates than conforming loans, although right now jumbo rates are nearly as low as 30 year conforming loan rates.
Requirements and Qualifications of Tampa / Hillsborough County Conventional loans.
- Loan amount – The loan amount for a conforming mortgage is generally limited to $417,000 for a single-family home in Tampa, though limits may be higher in regions where home prices are higher. Jumbo loans allow you to exceed the conforming loan limit to borrow for a higher-priced home.
- Down payment – Most conventional loans will require at least 5 percent (and optimally 20 percent or more) as a down payment. For loans with lower down-payment options, look into government-backed mortgages like USDA, VA and FHA mortgages.
- Credit history – Conventional loans are a good choice for borrowers with excellent credit, which generally means a FICO score of 740 or higher. In addition, there are also options for borrowers with lower credit scores below 680. However in many cases these lower credit score borrowers often find it more beneficial to do a FHA loan as conventional PMI is based on credit score and gets expensive below 680.
Florida and Georgia home buyers are encouraged to reach out to us 7 days a week. For quick service please submit the “Request Contact” form at the top right side of your screen. Mobile users can find the short Request Contact Form here. Please also be sure to call ph: 800-871-2636 and visit www.FiveStarsMortgage.com for the latest mortgage info.
Conventional Loans Requirements Tampa – Hillsborough County – Apollo Beach, Balm, Bealsville, Bloomingdale, Brandon, Carrollwood Village, Dover, Gibsonton, Lithia, Lutz, Mango, Orient Park, Plant City, Riverview, Ruskin, Seffner, Sun City Center, Tampa, Temple Terrace, Thonotosassa, Valrico. Pinellas County , Clearwater, Crystal Beach, Dunedin, East Lake, Gulfport, Indian Rocks Beach, Indian Shores, Kenneth City, Largo, Madeira Beach, North Redington Beach, Oldsmar, Palm Harbor, Pass-A-Grille Beach, Pinellas Park, Redington Beach, Redington Shores, Safety Harbor, Seminole, South Pasadena, St.Petersburg, Sunset Beach, Tarpon Springs. 2016