If you’ve been thinking about getting or applying for a home or mortgage loan but don’t know what’s the best option for you, then you might want to look at what goes into an application for Conventional Loans. There are a lot of different loans to choose from in the real estate world, and sometimes this can be a bit confusing, especially to many first-time homebuyers. To be quite fair, it’s pretty tricky to figure out which loan is perfect for you, but once you read through everything, it’s going to be a pretty smooth ride.
So, are you thinking about applying for a Conventional Loan?
Before we discuss anything else, let’s discuss what a Conventional Loan is. Basically, this type of loan is a mortgage loan that’s not backed by any government agency. So if you’re not too keen on getting money from the government, then this scheme could be just the thing for you! Plus, Conventional Loans originated and are serviced by private mortgage lenders. Now, private mortgage lenders establishments like the bank, credit unions or other financial institutions.
Although, the Conventional Loan is that type of loan that presents the most risks for lenders due to the fact that the federal government doesn’t insure them. So that’s also something that applicants should think about before proceeding with their loan application.
Due to this reason, the lenders usually extend different conventional mortgages to their applicants who have the most substantial financial profiles. Plus, a Conventional Loan requires a downpayment that ranges from 3% to 20%; this depends on the mortgage of your chosen property.
So if you want to know more about how you can apply for a Conventional Loan, then here are some of the requirements that you’ll need to prepare:
Proof of Income
This is something that most professionals have, and so it’s pretty easy to prepare this since most of you already have this without even realizing it. If you have the following, then you’re good to go:
– 30 days of pay stubs that show your income
-2 years of federal tax returns
– 60 days or a quarterly statement of all your asset accounts, including your checking, savings, and investment accounts (if available)
– 2 years of W-2 statements
Assets
You’ll need to present any bank statements that you may have, and if you’ve got any investment account statements, that can make your case a lot stronger! However, suppose you are to receive any amount of money from a relative or a friend to ‘assist’ you with your down payment. In that case, you’ll need to provide gift letters to certify that these amounts of money are not loans and you’re not obligated to repay them. You also have to take note that these gift letters have to be notarized.
Employment Verification
Naturally, the lenders who are about to give you the money would want to know that the people they’ll be loaning are the ones who have a stable work history. So you’ll want to prepare your pay stubs, and you might also need to call your employer so they won’t be surprised once these lenders decide that they’ll go snooping on your workplace. It’s normal though, don’t worry!
Other Documentation
These lenders will need a few other documentation like a copy of your driver’s license or state ID card, and even your Social Security Number. So be sure always to make sure that the lender you’re applying for is legitimate.
Nowadays, it’s hard to purchase your own house, but with loans like this one, your dream might actually be a reality!
It is definitely a bit tricky to choose the perfect loan for you, so it’s essential to reach out to a real estate agent who knows what they’re doing. In doing so, not only are you ensuring that you’re in good hands, but you can also bestow upon yourselves one of the best investments that you can ever get. So if you’re in Chattanooga, Tennessee, then the Ryan King Team | Keller Williams Realty is the one for you! Call us at +1 (423) 595 7958 or click here to discuss more of your loan options!
