ServicesConventional Loans
Conventional Home Loans in Elgin, TX
Conventional financing is the go-to home loan for borrowers with reliable income and solid credit. We build your quote from your real credit score, down payment and monthly debts, and you see the rate, points and every lender fee on paper before you commit.
How Conventional Financing Works
Conventional means the mortgage carries no FHA, VA or USDA guarantee. Most of these loans are written to Fannie Mae and Freddie Mac guidelines, so you will also hear them called conforming loans. With no government agency absorbing the lender's risk, your pricing rests mainly on your credit score, your loan-to-value ratio and your debt-to-income ratio.
It usually fits best when your credit is strong and you have 5 percent or more to put down, although some qualified first-time buyers can begin at 3 percent. The mortgage insurance is also temporary. Where FHA loans keep their premium in many cases, conventional PMI can be dropped once your equity grows, which often lowers what you pay over the life of the loan.
For a purchase or a refinance, we price the conventional option alongside FHA, VA or USDA so the differences show up line by line in writing.
What Our Conventional Loan Work Covers
- 01
Pre-qualification and pre-approval
We start with a pre-qualification conversation, then verify income, assets and credit for a full pre-approval letter. Sellers and agents take a verified pre-approval more seriously than an estimate.
- 02
A written rate quote
You get the rate, any discount points, lender fees and estimated third-party costs on paper. After you apply, the official Loan Estimate follows the same numbers so you can compare it against other lenders.
- 03
PMI options explained
If you put down less than 20 percent, private mortgage insurance applies. We show you monthly PMI, single-premium PMI and lender-paid options side by side, along with how each affects your rate.
- 04
Purchase and refinance loans
We handle conventional purchase loans, rate-and-term refinances and cash-out refinances. For a refinance, we show the break-even month so you know when the closing costs pay for themselves.
- 05
Underwriting and closing coordination
Your loan officer orders the appraisal, clears underwriting conditions and works with the title company until closing. You hear from us when a condition comes up, not after it delays the file.
Questions about Conventional Loans?
Call(512) 601-0828When Conventional Financing Is the Right Fit
Your score is at least 620
Most conventional programs start there. Rates get noticeably better once your score moves into the mid-700s and above.
You have savings for a down payment
With 20 percent down there is no PMI at all. For borrowers with good credit, even 5 to 10 percent down frequently costs less overall than FHA.
You want PMI that goes away
You can ask to cancel conventional PMI once you owe 80 percent of what the property was originally worth. If you never ask, it falls off on its own at 78 percent.
The property is a second home or rental
Government-backed loans require you to occupy the property. Conventional financing also covers second homes and investment properties, with a bigger down payment.
You want to refinance at a better rate
If rates have fallen or your score has risen since closing, a conventional refinance can lower the payment or eliminate the PMI you pay now.
From Your First Call to the Closing Table
- 1
Talk through your goals
We meet at our office or connect by phone or video to go over what you want to buy or refinance, plus your income, debts and savings. By the end you know roughly what you qualify for and which loan types are worth comparing.
- 2
Apply by phone and send documents
Your loan officer takes the application with you over the phone, then collects recent pay stubs, your W-2 forms, your last two bank statements and a photo ID. We review your credit report and send a written pre-approval that states the rate assumptions behind it.
- 3
Lock, appraise and underwrite
With a signed purchase contract in hand, you can lock your rate and we order the appraisal. The underwriter then reviews the full file and may request an updated statement or a short letter explaining a credit item.
- 4
Review and sign
The Closing Disclosure reaches you at least three business days ahead of closing. We compare it with your Loan Estimate item by item, and then you sign at the title company and pick up the keys.
Pricing Factors Behind Your Conventional Rate
Conventional rates are set by risk, so two borrowers applying the same morning can be offered different numbers. Fannie Mae and Freddie Mac attach loan-level price adjustments to specific traits of your file, and each one surfaces as either a higher rate or extra points. Your written pricing names the adjustments that apply to you and what each one costs.
- Credit score tier
- Every score band has its own adjustment. Raising your score by even one tier before you apply can trim the rate and the PMI premium at the same time.
- Loan-to-value ratio
- More money down means a lower LTV, a smaller pricing adjustment and cheaper PMI. Once the LTV falls under 80 percent, PMI is not required at all.
- Occupancy and property type
- A primary residence gets the best pricing. Condos, two- to four-unit buildings, second homes and investment properties each carry an added adjustment.
- Discount points and rate lock length
- You can pay points at closing to bring the rate down. A longer lock covers you if the closing runs slow, though it generally adds a small cost.
- Cash-out and loan amount
- Taking cash out on a refinance prices higher than a straight rate-and-term refinance. A loan over the conforming limit becomes a jumbo loan, which follows a different rulebook.
Common Questions About Conventional Loans
What down payment does a conventional loan require?
Some qualified first-time buyers can start at 3 percent down, and repeat buyers usually begin at 5 percent. Below 20 percent, PMI is part of the loan. We price the loan at more than one down payment level, so you can weigh keeping more cash in the bank against a higher monthly PMI cost.
Should I pick conventional or FHA?
Your credit score and down payment decide most of it. Borrowers with strong credit usually pay less on a conventional loan, since its PMI is priced on the score and can be canceled later. Borrowers with lower scores sometimes do better with FHA, so we put both options in writing side by side.
When can PMI come off my loan?
After regular payments bring your balance to 80 percent of the original value, you can ask your servicer to drop PMI as long as your payments have been on time. If you do nothing, it cancels by itself at 78 percent. If property values climb, a new appraisal can sometimes get it removed earlier.
How much debt can I carry and still qualify?
Plenty of conventional loans are approved with a debt-to-income ratio at or under 45 percent. Files with compensating strengths, such as solid reserves or high credit, can stretch to 50 percent. We work out your ratio from your real monthly debts before you apply.
Do you lend to borrowers outside Elgin?
Yes. We help borrowers in Manor, Hutto, Taylor, Bastrop and nearby areas, and most steps can be handled by phone or video.
See Your Conventional Loan Numbers in Writing
Tell us about your income, savings and the property you have in mind. A loan officer will walk you through pre-qualification and a written pricing breakdown that shows every fee before you move forward.