Conventional Loans

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Whether you are purchasing or refinancing, at Strock & Tanner Mortgage, we can assist you throughout the states of Florida. For further information on a full menu of residential mortgage loan products, email info@stcloans.com

Conventional: Loans up to $417,000

Conventional loans adhere to Fannie Mae guidelines. Normally, conventional loans have a 30-year fixed rate mortgage and often require a down payment of at least 20%. Conventional loans have the potential for better interest rates than non-conventional loans and are often a good option for those for those with the capability of making the 20% down payment. Average debt-to-income ratios for these loans are 28/36. These ratios increase once compensation factors are taken into account. Conventional loan standards are fairly flexible when it comes to credit history. However, a FICO score of 620 or above is beneficial in obtaining loan approval. In order to qualify for a conventional mortgage, monthly housing costs (mortgage principal and interest, property taxes and insurance) must meet a stated percentage of your gross monthly income (28% ratio).

The borrower must also show that he or she has enough income to pay housing costs, as well as all additional monthly debt (36% ratio). Conventional mortgage guidelines are eligible for the purchase of condos, planned unit developments, modular homes, manufactured homes, and 1-4 family residences. They can also be applied to finance primary residences, second homes and investment property. It is important to note that if the prospective borrower has been discharged from a Chapter 7 bankruptcy for 4 or more years, they are eligible to apply for a conventional mortgage. If the perspective borrowed had a Chapter 13 bankruptcy, it must be documented that his or her credit reputation has been re-established for at least two years to be qualified for a conventional loan.

FHA: Loans up to $417,000

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For an FHA loan, only a 3 percent down payment is required at closing, but the borrower can normally expect to put 3.5% down on a house (this money can be gifted from family, an employer or a charitable organization). Closing costs can be financed, creating a flexibility not possible with conventional loans. The FHA also places limits on lenders that limit the amount they can charge for some closing cost fees (e.g. the origination fee can be no more than 1% of mortgage). The most beneficial aspect of an FHA loan is they insure the loan against default. Upfront mortgage insurance premiums usually come out to be about 2.25% of the total loan amount.

FHA approval guidelines state that monthly housing costs (mortgage principal and interest, property taxes, and insurance) must be less than a stated percentage of the borrower's gross monthly income (31% ratio). The borrower must also have enough income to pay housing costs, as well as all additional monthly debt (43% ratio). Standard FHA loan requirement debt-to-income ratios (monthly income/current monthly expenses) are 31/43. These ratios may be exceeded once compensation factors are added. The flexible credit score requirements for FHA loans fall at a 620 FICO credit score, in order to gain approval. In order to meet FHA eligibility requirements, the borrower must also:

  • Have a valid US Social Security Number (SSN)
  • Be a legal U.S. resident
  • Be at or above the legal age to sign on a mortgage per state law. There is no maximum age limit for a borrower.
  • Have a valid Social Security Number (SSN), even as a U.S. citizen; a Tax ID number (ITIN) does not qualify as an acceptable substitute for a SSN.

203k: Loans up to $417,000

Loans of 203k may be used in order to purchase "Fixer-upper" or REO property that requires renovation. It allows the borrower to acquire funds to both buy/refinance and upgrade/renovate a home. Loan amounts for 203Ks are based on the value of the home, including renovations. This one loan can be used for both purchase and improvements. It can be used to buy property that would, in other instances, not be eligible for financing. A minimum down payment of 3.5%, is required for this type of loan, as well as a credit score of at least 640. Borrowers cannot currently have other FHA loans. However, they DO NOT have to be first-time buyers.

Jumbo: Loans up to $6 Million

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Those interested in acquiring a jumbo loan must be able to make a 20% down payment, or have at least 20% equity in a refinance; the borrower must also document his or her income. The monthly mortgage payment would be no more than 38 percent of the borrower's income before taxes. Borrowers who meet these qualifications find that today's rates are attractive (some receiving rates as low as 4.25%). Jumbo loans may be used to purchase single-family condos and vacation/second homes.

Foreign Nationals:

It is reasonably simple for non-citizens to buy and finance real estate in the United States. If a borrower is not an American citizen but wants to buy a house here, there are home loans for which they may be eligible . A number of mortgage lenders offer foreign national mortgage programs that work a lot like standard U.S. loans (except that the required down payment is normally larger -- about 30%.) The documentation required is also different from a conventional loan.

HomePath: Loans Up to $417,000

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HomePath financing is available only for Fannie Mae-owned properties. This type of financing offers great benefits, such as low down payment, no mortgage insurance, expanded seller contributions, and more. HomePath Mortgages are available for properties that are ready to be moved into by borrowers. However, HomePath renovation mortgages allow the borrower to use funds to both purchase and renovate in one loan. Borrowers may also use the financing of their choice from any lender, such as their local banks, credit unions or other financial institutions. HomePath loans offer no lender-requested appraisal, a low down payment (3% can be funded by savings, gifts, grants or non-profit loans from organizations, state or local government, or employers), flexible mortgage terms (fixed-rate, adjustable rate, or interest-only), and more seller contributions for closing costs. They are available for primary residences, second homes and investment properties—and many condo project requirements are waived.

At Strock & Tanner Mortgage we can assist you throughout the states of Florida with a full menu of residential mortgage loan products for purchase & refinance. For further information email: info@stcloans.com

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