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What is a conventional Loan?
A Conventional Mortgage is also known as a conforming loan. This type of mortgage follows a set of standards that define the maximum that can be borrowed along with a range of other financial considerations. Conventional mortgages are usually at a lower rate of interest than other types of loans and are typically amortized over 30 years. However you can also find conventional loans with an amortization schedule with as little as a 10 year term.
What are the requirements of Conventional Loan?
The requirements for a Conventional Mortgage are a Minimum credit score of 620 and the ability to pay from income any additional debt and housing costs. Your total debt to income ratio can usually be up to 36% and sometimes greater depending upon individual circumstances and underwriting approvals.
A Conventional Mortgage requires a minimum down payment of 5%. Because a Conventional Mortgage has traditionally required a 20% down payment, there is a requirement of purchasing Private Mortgage Insurance (PMI) on any mortgage financed greater than 80% of the value of the property. The PMI can be eliminated at any time during the life of the mortgage, once your mortgage debt decreases to 80% or less.
There are also a range of options on how you can structure the payment of the PMI. The PMI can be combined into the mortgage rate which is known as Lender Paid Mortgage Insurance (LPMI). The LPMI generally lowers the monthly amount required for the mortgage payment and a separate payment for the borrower paid mortgage insurance (PMI). There is a higher mortgage interest rate that will result with a lower overall payment associated with an LPMI. The LPMI is also “Baked In” to the mortgage so it cannot be cancelled until the loan is paid off or refinanced.
Because of the high cost of housing in most counties in and around the San Francisco Bay Area, Conventional Mortgage limits are $636,150. In most other parts of the country, Conventional Mortgage limits are $417,000.
How This Works.
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To quickly and successfully fund your loan at the lowest cost possible.
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Apply online through our streamlined “quick as a blink” application process called… Blink.
Our system can also securely sync with your bank to quickly and easily access your statements.
We’re here to help, or if you want – just start on your own and we can help complete your application later.
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We Work For You
We work for you, not the lender.
Because your financial situation is unique, your interest is better served if you’re not captive to a one size fits all mortgage offering. We represent a wide range of lenders so we can deliver to you the best loan at the best price for your particular circumstance.
Below are some of the types of loans available to you through our lender network.
Fannie & Freddie Eligible
The classic low cost home funding option. Available in both fixed and adjustable rate plans.
Ginnie Mae Eligible
The Federal Housing Administration (FHA), is a U.S. government agency that provides financing options that only require a minimum of a 3.5% down payment. FHA (203H) Disaster Loans however are eligible for 100% Financing.
Today, many homes require loans that exceed conforming loan limit amounts. Jumbo loans are a popular way to secure financing that exceed certain limits set by the Federal Housing Finance Agency (FHFA). Unlike conventional mortgages, a jumbo loan is not eligible to be purchased guaranteed or securitized by Fannie Mae or Freddie Mac.
The United States Veterans Administration (VA) provides up to 100% financing for homes as a benefit to veterans.
The U.S. Department of Agriculture’s (USDA) Rural Development Guaranteed Housing Loan program offer loans with up to 100% financing at rates below market and reduced mortgage insurance premiums with low credit score requirements.
A reverse mortgage or Home Equity Conversion Mortgage (HECM) is a type of home loan for older homeowners (62 years or older) that does not require the borrower to make monthly mortgage payments.
Private Equity Loans
Private Equity loans are based on the equity value of the property being put up for collateral and not necessarily on a borrower’s credit rating. This type of mortgage is a very useful for certain types of sophisticated borrowers such as those with multiple investment properties
Tam Funding is a licensed broker under the CA Dept. Real Estate: 02009074. Broker of Record NMLS : 1403204. Corporate NMLS: 1829222. CA Dept. Insurance: OL88065.
Borrower Conditional Approval is issued only when lender underwriting supplies a written clearance to do so. Borrower Conditional Approvals are conditional, not guaranteed and subject to lender review of all borrower information. The final funding of the loan is dependent upon all borrower conditions being met. Rates indicated are subject to market changes and may only be available to certain qualified borrowers. Tam Funding is an Equal Opportunity Real Estate, Mortgage & Insurance Broker
Equal Housing Lender
National Mortgage Licensing System