How to Get a Conventional Home Loan
Conventional home loans are the most convenient way to get a house after the subprime mortgage crisis. It is a traditional way of getting a house. Furthermore, you should know that in order to take conventional home loan, you must have a very good credit score and verified income. Besides, you should have the resources to pay a moderate down payment.
Instructions
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1
You need to start a savings account to pay the down payment and the closing costs which are associated with the loan. Generally, the lenders ask for 5-20% down payment. In addition, the closing costs are normally between $5,000 and $10,000.
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2
You should open a separate account to save at least six months of your living expenses so as to show your lender that you are capable of saving money and you will make the payments on regular basis.
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3
Now, get a copy of your credit report from all the three credit agencies which include Equifax, Trans Union and Experian because all the creditors do not always report to all the three agencies. Find the errors in the report (if any) and inform the bureaus about it.
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4
You must pay off your old debts in order to let your lender know that you are clear. Additionally, you have to pay your bills on time. Furthermore, you should wait for at least sixty days after paying off your debt to apply for the conventional home loan. Then, request for another copy of your credit report.
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5
Select a lender who offers you the best interest rates on the loan that suits your financial condition. It is to be noted that you should avoid the adjustable rates (if possible).
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6
You need to have an updated credit report, pay-check stubs or any other proof of income. Moreover, your financial statements will also be required if you are self-employed including your bank statements for all the accounts which you hold.
