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Conventional Loans are flexible, have lower costs, and come with rates that make this an option of choice for the majority of loans. These loans are also called conforming loans because they conform to standards set by Fannie Mae and Freddie Mac.
◊ Used for primary residence, second home, or rental/investment property.
◊ Are available in fixed rates, adjustable rates (ARMs), and offer many loan terms from 10 to 30 years.
◊ Down payments as low as 1% and 3% with no UPFRONT mortgage insurance if you qualify. Monthly PMI still applies.
◊ No monthly mortgage insurance with a down payment of at least 20%.
◊ Mortgage insurance costs can be lower than FHA depending on your credit score.
◊ Mortgage insurance can be cancelled when home equity reaches 20% without the need to refinance.
Most recent 60 days of bank statements, all pages.
Most recent 30 days of paystubs.
If W2 employee, 2 years tax returns including W2s.
If self-employed, two years tax returns. If you have been self employed for 12 months, call us for further information.
Social security, retirement, and/or pension award letters showing income will last 3 more years.
Rental agreements for any investment properties currently owned.
Lenders allow 75% of the rental income to be included as income when calculating DTI. You’ll need to provide 2-year lease agreements showing rental income. If you purchased the home as a primary residence, lived in it for a year then rented it, one year lease agreement and rental income will be acceptable. However, if you purchased the home as a primary residence, lived in it for a year, moved out and the home was unoccupied and show no lease agreement time period the home was vacant then leased it, be prepared to explain reason for the home to be unoccupied in order for the income to be counted in DTI. An acceptable reason could be the home was in major renovation over a majority of the year. Be prepared to show receipts.
Bankruptcy and Foreclosure Waiting Periods
Chapter 7 or Chapter 11 Bankruptcy: Four (4) years from the date of discharge.
Chapter 13: Two (2) years from the date of discharge.
Short Sale/Deed in lieu: Four (4) years from completion date. Can be shortened to two (2) years with extenuating circumstances*.
Foreclosure: Seven (7) years from completion date. Can be shortened to three (3) years with extenuating circumstances*.
*Extenuating circumstances are described as one-time occurrence events that are beyond the borrower’s control resulting in sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations. Must be able to document circumstances. Examples include death or serious illness of a wage earner. Divorce, inability to sell a property, or job relocation out of the area do not qualify as extenuating circumstances.
Call Multiline Mortgage Services for loan pre-qualification in 15 minutes or less.