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In Santa Fe, New Mexico most homes loans are conventional mortgages. Conventional loans are not unusual, but they do require full income documentation, a certain amount of assets, and good credit.
Conventional mortgage loans use Fannie Mae and Freddie Mac guidelines for underwriting. Both of these entities are now government-owned enterprises. A “conforming” or conventional loans is typically $417,000 or less for a single-family home, though loan limits for conventional loans can be higher in areas in the United States where there are more expensive homes.
Conventional loans have established guidelines that a borrower must meet for credit scores, income requirements, and minimum down payments. The guidelines change frequently but a minimum credit score of 620 is required. If a borrowers credit score is less than 740, Fannie Mae may impose a loan level price adjustment which adds to rate because the lenders funding these loans with lower credit scores assess this pool of loans as riskier. The down payment required on a conventional loan is a minimum of 5%, but any loan over a 80% loan to value requires mortgage insurance from and independent company. Conventional mortgage loans with lower credit risks (sub-prime) no longer exist.
Conventional mortgage loan terms are offered in 10 year, 15 year, 20 year, 25 year and 30 year loan terms. There are also a range of Adjustable Rate Mortgages (ARMs) with fixed periods of 3, 5, 7 and 10 years. Here at Mortgage Partners Santa Fe we make certain that we fit the loan product that fits your budget and your long term financial goals.
For your next mortgage loan, be it a purchase money mortgage, or a refinance mortgage transaction you’re taking out to remodel your home, call us at 505-629-4161.