Section 2: Am I Eligible for a Conventional Refinance Loan
Eligibility For a Conventional Refinance Loan
A conventional refinance involves replacing your existing home loan with a new conventional mortgage. This type of refinancing is flexible; you can use a conventional refinance to get a lower interest rate, cash–out equity, shorten your loan term, refinance a rental property, and more. Your current loan doesn’t have to be conventional to qualify. You can use a conventional refinance to replace an FHA loan, USDA loan, or any other type of mortgage with a low–rate conventional loan.
*Don’t meet the minimum requirements? You still may be eligible: talk with an Orbit Home Loan specialist today. (CLICK)
Down Payments
More often than not, you don't need to put down money to refinance your mortgage. In the typical rate-and-term refinance, which lowers your interest rate and payments and/or shortens your loan term, lenders generally look for an 80 percent loan-to-value ratio (LTV) or lower and solid credit, not money down.
Start your application now (CLICK)
Documents Your Lender May Require
- W2s or 1099’s
- Bank Statements
- Pay Stubs
- Asset Statements
- Liability Statements
- Legal ID
Contact a lender and verify eligibility (CLICK)
Conventional Refinance Lender Requirements
Credit and Income
In general a conventional refinance requires good to excellent credit. To reduce their risk, lenders require borrowers to have a credit score of 680 or higher to qualify for a construction loan. That’s just the minimum, as some lenders may require a score of 720 or better. If you’re planning to build a house, consider taking some time to improve your credit score before applying for a construction loan. In addition to having a strong credit history, you should have enough income to cover payments on your current debts and the new construction loan. To confirm this, your lender will ask for financial statements or other documentation demonstrating your annual income. A borrower’s debt-to-income (DTI) ratio is a comparison of all of your monthly debt payments to your gross monthly income. The lower your DTI, the more cash you theoretically have to make construction loan payments each month. To increase the likelihood that borrowers will be able to make payments, lenders typically require a DTI ratio of no higher than 45% when issuing construction loans.”
Complete the application (CLICK)
How to Apply for a Conventional Loan
Get started today with one of the best and most secure ways possible. Here are Orbit Home Loans we have a trusted team ready to help you find your dream home. Talk with you trusted Orbit Home Loans broker that knows conventional loans and how to get the most from this hard-earned benefit. The process typically starts with getting pre-approved, which can often be done in minutes using your phone, laptop or tablet.
Loan pre-approval is a key first step before making an offer on your dream home. Having that pre-approval letter gives you a clear sense of your buying power and shows sellers and listing agents you have what it takes to get to closing.
Questions about whether you qualify? (CLICK)