A conventional home loan in Bergen County NJ will give prospective homeowners the best interest rates and flexible terms. Conventional mortgages are not guaranteed or insured by the Federal government, thus the lender has room to be more flexible when they underwrite the loan. Though the lender has room to the negotiate with the terms of the loan, a conventional mortgage has more stringent prerequisites than those of insured or guaranteed loans. In addition, the borrower is required by most lenders to make down payment of a fifth of the purchase price.
Different Types of Bergen County NJ Conventional Home Loans
Conventional home loans fall into two broad categories: conforming mortgages and non-conforming loans. Conforming loans meet the guidelines established by Freddie Mac and Fannie Mae, while non-conforming loans do not. Except in atypical circumstances, conforming conventional home loans can't exceed $417,000, which is their greatest shortcoming.
The following are the most common kinds of conventional home loans:
Fixed Rate Loans: In Bergen County NJ, the most commonly picked type of conventional home loan by homeowners has been the 30 year fixed rate mortgage. The main disadvantage of this loan is that the borrower is stuck with their current interest rate, which is a big problem if it's a high interest rate.
Adjustable Rate Mortgages (ARM): Adjustable rate mortgages have interest rates that reset periodically. If there are high interest rates this is a commonly selected conventional home loan hoping that rates will be lower in the years to follow. The downside to this kind of loan is because the interest rate can rise considerably, there is a large amount of risk attached.
Jumbo Loans: Borrowers who require over $417,000 to finance a home use this type of mortgage.
Factors Lenders Take Into Account When Making Conventional Home Loans in Bergen County NJ
Lenders consider several factors to decide if a mortgage gets approved when looking over an application package for a conventional home loan:
* The prospective borrower must have an employment history which is stable and a steady source of income.
* The borrower's ratio of debt to income is required to be within acceptable limits. 33 percent is the maximum percentage of a person's income that can be plotted to the mortgage payments. The full amount of monthly debt recurring cannot be more than 41 to 45 percent for most Bergen County NJ conventional home loans.
* Despite the fact that some lenders may ask for scores which are considerably higher, a FICO score of at least 620 is required by most applicants. A consistent history of on-time payments will also be necessary for the borrower.
Use A Mortgage Broker Having Experience with Bergen County NJ Conventional Home Loans
Many potential and current homeowners have had to endure issues relating to their mortgage in recent years. This makes finding an honest and trustworthy mortgage broker for guidance when choosing a conventional home loan in Bergen County NJ all the more necessary.
Different Types of Bergen County NJ Conventional Home Loans
Conventional home loans fall into two broad categories: conforming mortgages and non-conforming loans. Conforming loans meet the guidelines established by Freddie Mac and Fannie Mae, while non-conforming loans do not. Except in atypical circumstances, conforming conventional home loans can't exceed $417,000, which is their greatest shortcoming.
The following are the most common kinds of conventional home loans:
Fixed Rate Loans: In Bergen County NJ, the most commonly picked type of conventional home loan by homeowners has been the 30 year fixed rate mortgage. The main disadvantage of this loan is that the borrower is stuck with their current interest rate, which is a big problem if it's a high interest rate.
Adjustable Rate Mortgages (ARM): Adjustable rate mortgages have interest rates that reset periodically. If there are high interest rates this is a commonly selected conventional home loan hoping that rates will be lower in the years to follow. The downside to this kind of loan is because the interest rate can rise considerably, there is a large amount of risk attached.
Jumbo Loans: Borrowers who require over $417,000 to finance a home use this type of mortgage.
Factors Lenders Take Into Account When Making Conventional Home Loans in Bergen County NJ
Lenders consider several factors to decide if a mortgage gets approved when looking over an application package for a conventional home loan:
* The prospective borrower must have an employment history which is stable and a steady source of income.
* The borrower's ratio of debt to income is required to be within acceptable limits. 33 percent is the maximum percentage of a person's income that can be plotted to the mortgage payments. The full amount of monthly debt recurring cannot be more than 41 to 45 percent for most Bergen County NJ conventional home loans.
* Despite the fact that some lenders may ask for scores which are considerably higher, a FICO score of at least 620 is required by most applicants. A consistent history of on-time payments will also be necessary for the borrower.
Use A Mortgage Broker Having Experience with Bergen County NJ Conventional Home Loans
Many potential and current homeowners have had to endure issues relating to their mortgage in recent years. This makes finding an honest and trustworthy mortgage broker for guidance when choosing a conventional home loan in Bergen County NJ all the more necessary.
About the Author:
Charles Barringer is a writer of articles pertaining to the mortgage industry. Click here to visit a recommended mortgage expert.
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