ServicesConventional Loans
Conventional Home Loans in Hutto
Steady pay, fair credit and some savings put most buyers on a conventional loan. We look over your file, show you what we found, and send you a copy of each step from loan application to closing, so you always know where things stand.
Who a conventional loan fits best
No government agency stands behind a conventional loan. Instead, lenders write it to guidelines from Fannie Mae and Freddie Mac. For you, that means no upfront funding fee. The mortgage insurance can also come off once you have built up enough equity.
This loan suits borrowers with reliable income, decent credit and a down payment saved up. Unlike FHA and VA loans, it can also pay for a second home or a rental property. If your credit history is short or you have military service, we run it next to FHA Loans or VA Loans and tell you straight which one costs less over the years.
We have been NMLS licensed for 10 years, and every file gets handled the same way. When we pull your credit, look at a pay stub or receive the appraisal, we send you a copy or screenshot with a short note explaining what it means for your loan.
What we handle on a conventional loan
- Pre-approval letter
- We review your income, assets and credit before you shop. You get a pre-approval letter a seller's agent will take seriously, along with the numbers it is based on.
- Down payment options
- Some first-time buyers qualify with as little as 3 percent down. We show you what 3, 5, 10 and 20 percent down each do to the monthly payment, so you choose with real numbers in front of you.
- A plan for mortgage insurance
- Put down less than 20 percent and you'll pay private mortgage insurance. We show you the loan balance where it can be dropped.
- Rate lock
- Once you're under contract, we lock your rate and send you the lock confirmation. You'll see the expiration date in writing so it doesn't slip by.
- Taxes and escrow
- Texas property taxes are a big part of the payment. We build taxes and property insurance into your numbers from the start, so the payment you see at application is close to the one you'll actually pay.
- Conventional refinance
- Already have a home loan? A refinance can lower your rate, shorten your term or pull out equity. We show you the month you break even on closing costs before you decide.
Signs a conventional loan may suit you
Your credit is fair or better
Conventional pricing rewards stronger credit. Scores around 620 and up can qualify, and each step higher usually lowers the rate or the mortgage insurance.
You have savings set aside
You don't need 20 percent down. But even 5 or 10 percent often makes a conventional loan cheaper than the other options.
You're buying a second home or rental
FHA and VA loans are for the place you live. A conventional loan can finance a vacation property or an investment house.
You're paying FHA mortgage insurance
FHA insurance often stays for the life of the loan. If the property has gained value, a conventional refinance may drop it for good.
Your tax returns show your income
W-2 earners and self-employed borrowers with two years of returns usually move through conventional underwriting without trouble. If your returns don't reflect what you really earn, Bank Statement Loans may be a better match.
What changes the cost of a conventional loan
We can't give you a real rate until we see your file. The cost comes down to a few things you can see, and sometimes change. Every one of them shows up on your Loan Estimate, and we'll point each one out.
Credit score
Higher scores get better pricing on both the rate and the mortgage insurance. Sometimes paying down one card before we pull credit moves you into a better tier.
Down payment size
More down means less risk for the lender, a lower insurance cost and often a better rate. Hitting 20 percent removes mortgage insurance entirely.
Property type and use
A primary residence prices best. Second homes, rentals and condos carry extra adjustments.
Points and lock length
You can pay points to buy the rate down. A longer lock, common on new construction, can also add cost.
Loan amount
Loans above the yearly conforming limit become jumbo loans with tighter rules. We'll tell you early where your amount falls.
How a conventional loan moves from call to closing
- 1
First phone call
We talk through what you want to buy or refinance, your income and your savings. You can start your loan application on that call, or by video if you'd rather see us.
- 2
Documents and credit
You send pay stubs, W-2s, two months of bank statements and ID. We pull credit and send you a copy of what we found, including anything that could slow things down later.
- 3
Contract and appraisal
With a signed contract, we lock the rate and order the appraisal. When the report comes back, you get the appraiser's photos and the value they recorded.
- 4
Underwriting
The underwriter may ask for a letter of explanation or another statement. We tell you exactly what they want and why, then send the approval once it clears.
- 5
Closing
Your Closing Disclosure arrives at least three business days before you sign. We go through it line by line against your Loan Estimate so nothing at the table catches you off guard.
Conventional loan questions we hear
How much do I need for a down payment?
First-time buyers can sometimes qualify with 3 percent down, and most other buyers with 5 percent. You'll also need money for closing costs. We'll show you the total cash to close, not just the down payment.
Can I get rid of PMI later?
Yes. You can ask to cancel it once your balance reaches 80 percent of the original value, and it drops off on its own at 78 percent if your payments are current. A new appraisal showing a higher value may let you remove it sooner, depending on the servicer's rules.
Is a conventional loan better than an FHA loan?
It depends on your credit and down payment. With good credit, conventional usually costs less because the mortgage insurance is cheaper and can come off. With lower scores, FHA can win. We price both and show you the numbers side by side.
Can I use a conventional loan on new construction?
Yes. New construction is common in this area, and a conventional loan works on a builder contract. We plan the rate lock around the builder's expected finish date so you aren't caught short.
Can gift money cover my down payment?
On a primary residence, yes, if it comes from a relative or another allowed donor. You'll need a signed gift letter and bank records showing the transfer. We'll tell you exactly what paper trail the underwriter wants.
Do I have to come to your office?
No. Plenty of borrowers from Round Rock, Pflugerville and Georgetown do the whole loan by phone and video. You're welcome at our office if you'd like to sit down in person.
Start with one phone call
Tell us what you want to buy or refinance. We'll take your loan application over the phone and send you a copy of everything we review along the way.