Getting to Know Conventional Loans in Michigan

Marc Edelstein connects soon to be home buyers with lending options that meet their specific needs. One of the products we offer is the Conventional loan (Sometimes referred to as a “conforming loan”). The Conventional Loans conform to Fannie Mae and/or Freddie Mac guidelines. These two agencies purchase mortgages from lenders and sell them to investors, making mortgages more widely available to homebuyers. Marc Edelstein helps his clients in West Bloomfield, Rochester, Livonia, Ann Arbor, and the whole state of Michigan. Contact Marc Edelstein today to schedule a consultation to learn more information about Conventional home loans in Michigan.

Fannie Mae and Freddie Mac were created by the US Government in 1970 to help support the mortgage lending industry and to make mortgage financing more accessible to potential home buyers and current home owners. They developed a uniform standard of mortgage documents and guidelines, which still stand today. Sure, there have been some changes along the way, but to this day, the conforming/conventional mortgage is the gold standard of our industry. Conventional loans have loan limits, which cannot be exceeded. In Michigan, the conventional loan limit for 2018 is $453,100. To search for the Conventional loan limits in your county, use this link.

Who Can Get a Conventional Loan in Michigan?

Conventional loans are available to all home buyers who have a minimum credit score of 620. Sure, there are other factors that are taken into consideration like debt-to-income ratio, credit profile, and loan amount, but borrowers with greater than a 620-credit score are eligible for Conventional loans.

Benefits of Conventional Loans!

• Low down payment requirement, as low as 3% on primary residences
• No pre-payment penalties
• Sellers may contribute to the buyer’s closing costs
• Single and Multi-Family home are eligible
• Can be used to purchase/refinance and 2^nd Home or Rental Property

Why you may not Qualify for a Conventional Loan

• Credit History/Score – If there are recent late payments on current credit, or credit scores are below 620, a Conventional loan may not be available.
• Debt-to-Income Ratio – If the total income divided by debts, including the new mortgage payment, is greater than 50%, a Conventional loan may not be available.
• Documentation – All borrowers are required to provide documentation to support employment/income/asset history. If either of these cannot be supported with acceptable documentation, a Conventional loan may not be available.
• Major Derogatory Credit Event – If the borrower has a short sale/foreclosure/bankruptcy in their recent past, last 4 years, a Conventional loan may not be available.

 

Working with a Qualified Lender

Choosing to work with Marc Edelstein of Ross Mortgage can help the homebuying process go smoothly. With over 17 years of experience Marc Edelstein knows how to match each client with the right loan that works for them. Marc Edelstein can help you get pre-approved which gives you leisure to focus on the actual home search! To learn more about Conventional loans in Novi, Northville, South Lyon and the whole state of Michigan contact Marc Edelstein today.