ServicesConventional Loans
Conventional Loans in Wimberley
A conventional loan is the most common home loan in the country, and often the lowest long-term cost for borrowers with steady income and solid credit. We'll tell you plainly whether it fits you, what it will cost and what to expect before closing.
What a conventional loan is, and when it makes sense
A conventional loan is a mortgage that isn't backed by a government agency like the FHA, VA or USDA. Most follow guidelines set by Fannie Mae and Freddie Mac, which is why the rules on credit, debt and down payment are fairly predictable from one lender to the next.
It tends to be the right call when your credit is in good shape, your debts are manageable next to your income, and you can put down at least a few percent. Put down 20 percent and there's no mortgage insurance at all. Put down less and the mortgage insurance can come off later, which is a real advantage over an FHA loan for many buyers.
It works for a primary residence, a second home or an investment property. If it isn't the best fit, we'll say so and walk you through FHA Loans, VA Loans or USDA Loans instead.
What you get when we handle your conventional loan
- A rate quote you can compare
- We quote your rate with the points, lender fees and estimated closing costs spelled out. That way you can line it up against any other offer and see the real difference.
- Pre-qualification and pre-approval
- We start with a quick pre-qualification by phone. Once we've reviewed your documents, we issue a pre-approval letter your agent can send with an offer.
- Down payment options side by side
- We show you what 5, 10 and 20 percent down would each do to your monthly payment and your mortgage insurance. Seeing the numbers next to each other makes the choice much easier.
- A plan for mortgage insurance
- If you put down less than 20 percent, we explain what private mortgage insurance costs you and when it can be removed. You'll know the path to dropping it before you sign.
- One loan officer through closing
- You talk to the same person from the first call to closing day. Questions about the appraisal, the title work or a last-minute document request come to someone who already knows your file.
Signs a conventional loan may be your best option
Your credit score is 620 or higher
That's the usual floor for conventional loans. The higher your score, the better your rate and the cheaper your mortgage insurance.
You have some cash saved for a down payment
A first-time buyer may need only 3 percent down to get approved. Plenty of borrowers choose to put down 5 to 20 percent so the monthly payment comes in lower.
You don't want mortgage insurance forever
FHA mortgage insurance often stays for the life of the loan. Conventional mortgage insurance ends once you build enough equity.
You're buying a second home or a rental
Government-backed loans are mostly for the place you live in. A conventional loan can also finance a weekend place or an investment property.
You're refinancing out of an FHA loan
If your property value has climbed since you bought, a refinance into a conventional loan may drop your mortgage insurance and lower your payment.
The steps between your first call and the closing table
- 1
A conversation to get started
We talk by phone about what you earn, what you owe each month, what you've saved and the price range you have in mind. You'll hang up with a pre-qualification and a rough idea of your monthly payment.
- 2
Paperwork, then your pre-approval
Next we'll ask for your latest pay stubs and W-2 forms, statements covering the past two months for your accounts, and your OK to check credit. Once we've looked it all over, your pre-approval letter goes out so your agent can include it with an offer.
- 3
Locking your rate once you're under contract
When the seller accepts your offer, we discuss whether to lock your rate now and how long the lock should run. The appraisal gets ordered the same week.
- 4
Underwriting and appraisal
An underwriter reviews your file while the appraiser confirms what the property is worth. If you're buying Hill Country property with acreage, a well or a septic system, we point out what the appraiser will look for up front so it doesn't hold up your closing.
- 5
Closing day
Your Closing Disclosure arrives no later than three business days before signing. We walk through every line of it with you, so the numbers at the table match what you expected.
What moves the cost of a conventional loan
No one can quote you a real rate until they know your numbers, and anyone who does is guessing. Your rate and fees come from a handful of factors. Here's what matters most and why.
- Credit score
- Fannie Mae and Freddie Mac price loans in credit score tiers. A jump of 20 points can lower your rate and your mortgage insurance at the same time.
- Down payment and loan-to-value
- The more you put down, the less risk the lender carries. Crossing 20 percent down removes mortgage insurance entirely.
- Property type and use
- A primary residence gets the best pricing. Second homes, investment properties, condos and multi-unit buildings carry added costs.
- Points and lock period
- You can pay points at closing to buy a lower rate, or take a slightly higher rate with lower upfront cost. A longer rate lock usually costs a little more.
- Loan amount
- Loans above the conforming limit are jumbo loans with their own pricing and stricter rules. We'll tell you where your purchase price lands.
Conventional loan questions we hear most
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How much do I really need to put down on a conventional loan?
Some first-time buyers get approved with just 3 percent down, and plenty of others with 5 percent. Putting 20 percent down means no mortgage insurance, but nobody requires it. We'll show you the payment at several down payment amounts so you can pick the one that feels right.
When does private mortgage insurance come off?
After your loan is paid down to 80 percent of the property's original value, you have the right to request cancellation. When the balance hits 78 percent, the servicer has to cancel it on its own. If values have risen since you bought, a fresh appraisal can sometimes get it removed earlier.
Should I pick conventional or FHA?
In most cases your credit score and down payment settle the question. With a score in the upper 600s or higher, a conventional loan often costs less over time because its mortgage insurance doesn't last forever. With weaker credit, FHA may come out ahead, so we lay out both options side by side and let you compare.
Can I use gift money for my down payment?
Yes. On a primary residence, a relative can cover part or all of the down payment as a gift. The underwriter will want a signed gift letter and proof of how the money moved into your account. We'll give you a clear list of what to gather.
I'm self-employed. Can I still get a conventional loan?
Often you can, as long as your last two years of tax returns show income that holds steady. If deductions make your taxable income look smaller than what you actually earn, a bank statement loan might suit you better. We're happy to compare the two with you.
How long does it take to close?
Once you're under contract, a typical conventional purchase takes roughly 30 to 45 days to close. The appraisal timeline and how fast your documents come back matter most. We'll keep you updated as each piece is done.
Find out what a conventional loan would cost you
Tell us a little about your income, savings and the price range you're looking at. We'll give you a rate quote and a straight answer on whether conventional is your best option, or start your pre-qualification on the same call.