Conventional loans are mortgage loans offered by non-government sponsored lenders. A conventional, or conforming, mortgage adheres to the guidelines set by Fannie Mae and Freddie Mac. It may have either a fixed or adjustable rate.
While many think that a 20% down payment is required for all conventional loans, many lenders now offer low down payment options. Alligator Mortgage Company can offer down payments as little as 1% down or 3% down on Conventional Loans in certain areas of Florida. Typically when putting down less than 20% then you have monthly mortgage insurance. We have options of 5% or 10% down payment with no monthly mortgage insurance.
Florida Conventional Loan Requirements
- Down Payment – 5% of the purchase is the typical down payment available. However, Alligator Mortgage Company has Conventional Loan programs with 3% down payment or even just 1% down payment for limited scenarios.
- Credit Score – A minimum credit score of 620 is needed to qualify for maximum financing. Those with lower credit score may want to look at Alligator Mortgage Company’s FHA Loan Programs where we routinely close FHA loans down to 580 score with just 3.5% down payment.
- Debt to Income Requirements – A debt to income ratio (DTI) of 45% is generally the maximum if the Loan To Value (LTV) is over 80%. A DTI of up to 50% may be obtained with lower LTV’s.
- Property Requirements – All properties must meet certain security, safety, and structural integrity requirements. We can do single family houses, mobile homes on land, townhouses and some condos.
- Refinance – Rate Term can do up to 95% of the LTV. Cash Out will be capped at 80% LTV.
Alligator Mortgage will counsel with you on the different options with conventional loans. Putting down 10% instead of 5% may or may not change the interest rate, but it will decrease your monthly mortgage insurance amount. We will present options as to whether it makes sense to have monthly mortgage insurance or not to. We will discuss the difference between 15 and 30 year fixed rate conventional loans and even review Adjustable Rate Mortgages (ARMS) if you are interested in them.
Contact us today for more information on Florida conventional loans or to begin the pre-qualification process.