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Is a Conventional Mortgage Right For You

by PrimeResUS

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There are many different types of Utah home loans and different qualifying considerations for each one. A conventional mortgage is a type of a home loan in which you, the borrower needs to assemble precise statutes that allow the lender to ease some of their burden of loaning you hundreds of thousands of dollars. Conventional mortgages tend to come with lower interest rates because of this. It is harder for the average person to get a conventional mortgage than other types of Utah mortgage loans, but the process itself is a piece of cake. The lower interest rates are given to these types of loans because they are harder to qualify for. You will need a higher credit score and higher income than the average person to qualify for your loan. You will probably also have to come up with more of a down payment than with other types of Utah loan programs. Your interest rate for a conventional mortgage will be lower because of the higher standards that are set for the loan. Making the loan harder to qualify for allows the lenders the courage to lend the money for the mortgage. If you qualify for a conventional mortgage, not only will your interest rate be lower, but so will your monthly payments. You will still have a decent sized down payment to make on the loan, which is generally in the five to twenty percent range. There is traditionally a limit on the amount you can take with a conventional loan, and that amount is four hundred seventeen thousand dollars. If you live in specific high cost areas however, your loan limit will increase to upwards of seven hundred twenty nine thousand dollars.


The conventional loan is also called a conforming mortgage. It is called a conforming mortgage because the loan must conform to the standards set forth by two government owned corporations, Fannie Mae and Freddie Mac. The qualifications for a conventional loan are harder to get than other types of loans. First, you must have a passable credit score. If you want to be considered, you must have a minimum credit score of six hundred twenty. That is just the minimum. Anything above six hundred eighty is ideal and obviously the higher your score is the more likely you are to qualify and your monthly payments are possibly even your down payment will be less. It is wise to stay on top of your credit score so that you always know where you stand. Buying a home with a conventional loan is almost impossible with a poor credit score, so it is imperative that you do what you can to keep yours as high as possible. This includes doing things like making your monthly bill payments on time. Your loan officer will also be looking at your bill payments. If you have a very high credit score, but you have failed to make any payments on all your accounts for the last 4 months, you might have a problem. Remember that your credit isn’t only based on your score, but what you have been doing with your finances lately and how you handle them. If you aren’t up to par with your finances you are unlikely to qualify for any loans. This also matters if you have had a bankruptcy. You will have a hard time getting a Utah home loan if you have had a bankruptcy, especially in the last four years. If you bankruptcy has been longer than four years ago you will be better off, but you will still be at a disadvantage unless all your other credentials shine through.


If you have had a bankruptcy in the last four years, you are probably just better off trying to acquire a different type of Utah home loan. The lender wants you to have a high credit score, make all your payments on time and have had no bankruptcy so they can give you a lower interest rate on your loan. Utah home financing is not difficult but you must be organized and have many things together before you jump in. Some conventional mortgages will only require you to put five percent of the home’s value for your down payment. Most conventional mortgages require somewhere around twenty percent, however. If you are asking for the maximum of four hundred seventeen thousand dollars, your five percent down payment will be twenty thousand eight hundred and fifty dollars. If your down payment is the more standard twenty percent you will have to put down eighty three thousand four hundred dollars. This is why it is imperative that you have a good credit score and that you stay on top of it. A lot of conventional mortgages also require that you put down three months worth of payments. So if your monthly payment is eleven hundred dollars, you will need thirty three hundred dollars held back. This money that is held back doesn’t have to be money, but can also be something like a 401K account.


If you are trying to get a Utah home loan you need to remember to have all your finances in order. Do what you can to get your credit score as high as possible before trying to secure financing. Make all of your monthly payments on time and don’t have too much debt that you can’t pay for your new mortgage.


About the Author

Primary Residential Mortgage, Inc. is one of the premier lenders in the mortgage industry. Our goal is to provide borrowers with the best possible financing options available in today's mortgage lending environment. Call us at 1-888-808-8227 for more information or visit us at


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