Conventional

Conventional Loans

Full Suite of Conventional Mortgage Loans 

With Expert Home Loan Advice 
Conventional mortgage loans are quite popular with homeowners in Michigan and across the United States. Terms range from 15 to 20, 25 and 30 years, with some lenders providing 10-year terms. They can be easier and faster to close than their government-backed counterparts and typically offer lower mortgage rates. If you have good credit, a steady income and can afford the down payment, there are many lending options available to you. Home loans conforming to Fannie Mae and Freddie Mac guidelines require you to put down a minimal 3% which can come from multiple sources.

Standard Conventional Loan

 Aside from the HomeReady and Conventional 97 loans offered by Freddie Mac and Fannie Mae, most traditional home loans require a minimum 5% down payment. It could be 10% to 20%, or even higher, for larger loan amounts. The advantage of putting down 20% or more is that you can avoid mortgage premium insurance. A conventional loan is especially good for first-time borrowers with decent credit and some amount of down payment.

Home Ready

Individuals and families with a low to moderate income and good credit can take advantage of this Fannie Mae home loan. Unlike government-backed loans, borrowers may have the option to cancel mortgage insurance once their home equity reaches 20%. Cash for down payment and closing costs can come from multiple sources, including gifts, grants, etc.With the HomeReady Mortgage, you can own a home with as little as 3% down, with no minimum contribution required from your own funds! 

Home Possible

This 3% to 5% low down payment mortgage loan is an attractive option for first-time homebuyers, young or low to moderate income borrowers, and retirees. If you are looking to move from renting to buying, explore this Freddie Mac financing tool which can be used both for new home purchase as well as refinancing. 

(NEW) Home One

Designed to help a broader segment, this Freddie Mac loan program is available to qualified first-time homebuyers for a low down payment of just 3%. While there are no income or geographic restrictions, at least one of the borrowers must be a first-time homeowner. 

Home Style Renovation

Provides a convenient and flexible way for borrowers who are considering home improvements to make repairs and renovations as a first-time mortgage buyer. 

The Recast

What is a Recast?

A recast is a process to accept a large down payment and by doing so, lower the monthly payment.

Who qualifies?

A recast is only available to loans that are FNMA or FHLMC Loans.

Are there any other requirements?

  • The loan must be current.
  • The large down payment must be 10% of the UPB (Unpaid Principal Balance) with a minimum of $5,000.
  • There is a fee of $250 to process the documents.
  • Written request from customer for the recast. 

What happens next?

  • The customer will need to send a formal request to customer service 
  • At that time they will be sent the recast letter advising them to send in the 10% with a minimum of $5,000, and the $250 fee

Recast Procedures:

  1. Funds are received from the borrower and Cash is able to identify it’s for a Recast.
  2. Lender posts the funds in the Unapplied Bucket 5K.
  3. Lender applies the $250.00 Recast Fee to Fee Code 195.
  4. Lender opens CIT 644 notifying Loss Mitigation the amount of the funds received, they’ve been placed in 5K, and borrower is requesting a recast.
  5. Once Loss Mitigation reviews the loan for a Recast and it’s approved they will open CIT 364 to notify Cash to apply the funds to principal.
  6. If the Recast is not approved the Call Center will reach out to the borrower to see if they want their funds returned to them or applied to the loan as a principal payment.
**Loans with delinquent payment history in the last 12 months or a down payment of less then 10% of the balance (may not be approved).
Do you need assistance deciding which is the right home loan for you? Come and talk to us at Dividend Mortgage. We will explain the pros and cons of conventional mortgage loans as well as those offered by the Federal Housing Administration (FHA), Veterans Administration (VA) and U.S. Department of Agriculture (USDA). Count on us to help you find the best fit and competitive mortgage rates. 

Call 269-321-8950 or contact us online to set up a consultation for a conventional mortgage loan.
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