Wednesday, January 11, 2012

CONVENTIONAL MORTGAGE LOANS IN ALABAMA

If you are purchasing or refinancing a home in Alabama you have several different loan products available to you if you qualify. Today I am going to talk about Conventional Mortgage Loan for Purchase and Refinance.

A Conventional Loan is really the "Cream of the Crop". In most situations they are for folks who have excellent credit, 5% or more for a down-payment and assets.

What is considered excellent credit? By today's standard an excellent credit score is considered to be 740 or higher. Credit scoring models go up to 850. A 740 middle score will yield you the best interest rate available. When I pull credit for approval, I will receive a credit score from Experian, Equifax and TransUnion. The middle score is the one I will use. Once your score drops below the 740 mark you will begin to take a hit to the rate based on this number.

How much do I need for a down-payment on a Conventional Mortgage? The minimum down-payment for a conventional loan is 5% of the sales price. The more money you have for a down-payment will also get you a better interest rate and reduce your monthly private mortgage insurance (PMI)if you don't have at least 20% to put down. If you are refinancing your home the percentages on equity are the same. Loan to value may not be over 95% worse case scenario. I do however have a great product to eliminate your monthly private mortgage insurance when you purchase or refinance. This is a single up front premium which is paid by the borrower on a purchase, or rolled into to closing costs if refinancing. This is one of the greatest things since sliced bread.

What is considered an asset? An asset is anything that is or can be liquid. Your checking accounts, savings accounts, IRA's, Money Market, 401k or stocks and bonds. All of these would be considered assets because if push come to shove you could cash out and have money available. The more assets you have the better you look to an investor about to lend you large sums of money.

A few more things to remember...If you are purchasing or refinancing a home between $271k and $417k you will pretty much have to go with a Conventional Mortgage. $271k and below have many other options and $417k and up are considered JUMBO.

It is very important to keep your credit in tip top shape and also have a mortgage loan specialist look at your scenario every year. You may spending hundreds of dollars that could best be put to use in other ways.

Today I closed a Conventional Mortgage refinance and his 15 year mortgage is less than the monthly payment he was making on his 30 year mortgage. It takes about 10 minutes for me to assess your individual needs so please let me show you what I can offer.

As always, Yours to Count On. Valerie Springer 205-995-7283 x 305

My name is Valerie Springer nmls 198479, Home Mortgage Expert and writer for Ask Val in Birmingham, Alabama. You may contact me by email at valerie.springer@benchmark.us or call 205-314-4775.

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