ServicesConventional Loans
Conventional Loans in Jonestown
A conventional loan is the most common way to finance a purchase or refinance. We walk you through the rate, the down payment and the paperwork, and the loan officer who quotes your rate stays with your file until closing.
What a conventional loan is, and who it suits
A conventional loan is a mortgage with no government program standing behind it. Most are written to standards published by Fannie Mae and Freddie Mac, so the expectations for credit, income and down payment are well defined and predictable. It is usually a good match for borrowers with reliable income, credit in good order and some savings in the bank.
Its strength is range. A conventional loan can finance the house you live in, a second home or a rental. Put down less than 20 percent and you will carry private mortgage insurance, but unlike the coverage on some government loans, it can be dropped once your equity grows far enough.
We keep our office small on purpose. The loan officer who reviews your numbers on the first call is the one who answers your questions in the last week before closing. If a conventional loan is not the right fit, we will tell you plainly and show how an FHA loan or VA loan would compare.
What we handle on a conventional loan
A rate quote you can read
We break out the rate, any points and the estimated closing costs line by line. You can see how the numbers shift with a larger down payment or a different term.
Pre-approval before you shop
We look closely at your income, assets and credit at the start, then write a pre-approval letter that shows sellers you are ready to buy. Careful work at this stage keeps surprises out of the contract period.
Down payment and mortgage insurance planning
We show how each down payment amount changes your monthly payment and your mortgage insurance. Some borrowers would rather keep cash in reserve; others want mortgage insurance gone from day one. Both are sound choices.
Appraisal, title and underwriting
We order the appraisal, work with the title company and respond to underwriting conditions as they arrive. If something looks likely to slow down, you hear about it from us first.
Refinance options
A conventional refinance can bring down your rate, shorten your term or remove mortgage insurance carried on an older loan. Texas sets its own rules for cash-out refinances, and we go over them before you commit.
Signs a conventional loan may be the right call
Your credit is in good standing
Stronger credit usually earns a better conventional rate. If your score has improved since you last checked, it is worth a look.
You have savings for a down payment
Some conventional programs allow a modest down payment, and 20 percent removes mortgage insurance entirely.
You are buying a second home or rental
Government loans are generally limited to a primary residence. A conventional loan can finance a lake place or an investment property.
You are paying mortgage insurance you could drop
If you carry an FHA loan and have built equity, refinancing into a conventional loan may remove a monthly cost that would otherwise stay for years.
Your income is steady and documented
W-2 income or two years of tax returns make a conventional file straightforward. If your income runs through a business, a bank statement loan may be the better path.
How a conventional loan moves from first call to closing
- 1
A conversation about your goals
We start by phone or video, or at our office. We ask what you are buying or refinancing, when you need to close and what monthly payment sits comfortably with you, then give you a rate quote built on your actual numbers.
- 2
Paperwork and pre-approval
We ask for recent pay stubs, two years of tax returns and a couple of months of bank statements, and we read through them carefully before writing your pre-approval. Anything an underwriter might question gets raised now, while there is time to sort it out.
- 3
Application and appraisal
Once you are under contract or ready to refinance, we complete the application, lock your rate when you say go and order the appraisal. The same loan officer keeps you updated the whole way.
- 4
Underwriting and clear to close
The underwriter reviews the complete file and may ask for a few more items. We collect them with you and keep the title company and your agent in the loop.
- 5
Closing day
Before you sign, we go over the final closing disclosure with you so every figure matches what you were expecting. Then you sign, and the loan funds.
What shapes your conventional loan rate and costs
Conventional loans are priced file by file, so two borrowers buying similar houses can see different numbers. Your rate and closing costs come down to a few factors, and we go through each one with you so you can see where a small change pays off.
- Credit score
- Pricing steps up or down in bands tied to your score. Moving up even one band can trim your rate or lower what you pay for mortgage insurance.
- Down payment and loan-to-value
- Starting with more equity means the lender takes on less risk. Once you reach 20 percent down, mortgage insurance is no longer part of the loan.
- How the property will be used
- A house you live in full time earns the most favorable pricing. Second homes, rentals, condos and two- to four-unit buildings each carry their own adjustments.
- Loan term and points
- Shorter terms, such as 15 years, usually come with a lower rate than 30 years. Paying points at closing buys the rate down, which makes the most sense if you expect to keep the loan for many years.
- Rate lock timing
- Rates change every business day. We look at your expected closing date with you and plan the lock around it, so the timing is a decision rather than a guess.
Questions about conventional loans
Something not covered here? (512) 960-3427
How much do I need for a down payment on a conventional loan?
Some conventional programs work with a small down payment, especially for first-time buyers. Twenty percent down removes mortgage insurance, but you do not need it to qualify. We lay out the monthly cost of a few down payment amounts side by side so you can pick with real numbers in front of you.
When can I remove private mortgage insurance?
You can generally request cancellation once your balance falls to 80 percent of the original value, and it typically drops off automatically at 78 percent. Paying extra toward principal or a rise in the property's value can move that date forward. When you get close, we walk you through what the servicer will ask for.
Should I choose a conventional loan or an FHA loan?
The answer usually comes from your credit score and how much you plan to put down. FHA tends to be more flexible with credit, while borrowers with stronger scores often pay less over the life of a conventional loan since its mortgage insurance can be removed. We run both options with your numbers so you can compare them directly.
Can I use a conventional loan for a rental property?
Yes. Investment properties can be financed conventionally, with a larger down payment and different pricing than a primary residence. If the deal needs to close quickly or the property needs work before it can be financed, a hard money loan or bridge loan may be the better tool.
How long does a conventional loan take to close?
The appraisal, the title work and how fast documents come back set the pace. Starting with a pre-approval already in place takes a good deal of time off the back end. We give you an honest timeline on the first call and update you as each step clears.
Start with a clear conventional rate
Tell us what you are buying or refinancing, and we will put together a rate quote you can compare with confidence. The same loan officer stays with you through pre-approval, application and closing.