Saturday, February 16, 2008

Conventional mortgage loans are rare

Conventional mortgage loans is the most common type of mortgage.

Conventional mortgage loans make up any mortgages that are not guaranteed by the government. In general, conventional loans are more difficult to qualify for and require large down payments; however, the guidelines used to determine whether a property is suitable for purchase under the mortgage terms are more lenient. This is the most common type of mortgage.

Conventional mortgage loans are available with fixed or adjustable interest rates. Some loans may require mortgage insurance. Some manufactured-house customers can get mortgages from local banks, similar to those for site-built houses. These mortgage loans generally carry lower interest rates and have more legal protections than the loans through the dealers. However, the mortgage loans are rare because many manufactured-house customers have bad credit, or lack a credit history, or don't know that they have the option to seek a mortgage.

Practically all conventional conforming loan programs share the same core document requirements:

Pay stubs for the past two pay period.

Bank statements for the previous two months.

Tax returns and W-2s for the past two years.

Some programs are called no income verification, no asset verification and no documentation loans.

Unfortunately, many homebuyers and investors misinterpret the true program requirements. Contrary to what many people mistakenly believe, these programs will still require a good deal of borrower documents. They just don't require as much.

The no income verification program will not require income documentation, but lenders will still require documentation of the borrower's employment. The no asset verification program will not require documentation of the "source" of the asset funds that the borrower must have to qualify for the loan. However, the no asset verfication program will still require documentation of the current funds.

The no documentation loan is a combination of the no income verification and no asset verification programs.

The "no doc" will require income and asset-source documentation, but it will still require employment, current asset and other documentation.

4 comments:

Unknown said...

Yes i agree with you.mortgage in which the underlying terms and conditions meet the funding criteria of Fannie Mae and Freddie Mac. About 35-50% of mortgages, depending on market conditions and consumer trends, are conventional mortgages. In other words, Fannie Mae and Freddie Mac guarantee or purchase 35-50% of all mortgages. Conventional mortgages may be fixed-rate or adjustable-rate mortgages.

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Skyden Dredge said...
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Skyden Dredge said...

The blog has talked about the various aspects of a conventional loan. Conventional loans are issued by the private lenders but these loans are guaranteed not guaranteed by the federal government. The down payment required to obtain this loan is very high. There are two types of a conventional loan – conforming loan and non-conforming loan. In case of a conforming loan, there is a certain limit on the amount of money that you can borrow. But, in case of a non-conforming loan, no such limit is there. Term and rate wise, there are different types of conventional loans. Conventional loan may be of fixed or adjustable rate type. Term of the loan may be 15 years or 30 years.

Unknown said...

I really liked your Information. Keep up the good work. Mortgage Calculators

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