Good credit? This is a Good Option!
A Conventional loan is the most common type of mortgage because it is cost effective, applicable to nearly all types of properties and offers flexibility in loan terms, programs, and limits. This is a great option for borrowers with a good credit score and some money set aside for a down payment.
Unlike FHA, VA or RD loans, conventional loans do not require private mortgage insurance (PMI) unless the borrower has less than 20% down. Some conventional loan programs require as little as 3% down! Additionally, you can cancel PMI once you reach 20% home equity. This type of loan can save quite a bit of money in the long run!
Conventional loans can be used for purchase or refinance on a primary residence, second home, investment property, multi-family residences, condos, and some manufactured homes. The amount you can borrow is not restricted by state and county loan limits.
MiMutual Mortgage offers a variety of conventional loan programs. These include Fannie Mae’s (FNMA) HomeReady loans and Freddie Mac’s (FHLMC) Home Possible, HomeOne, Refi Possible and Enhanced Relief Refinance loans.
Conventional Loan Types
The HomeReady Loan is a great option for borrowers with low to moderate income and limited cash for a down payment. To meet HomeReady Income requirements, your income must be equal to or less than 80% of the area median income (AMI) for your county. Or, if you make more than 80% of the AMI, the home must be in a low-income census zone.
You don’t have to be a first-time homebuyer and the down payment can be as little as 3% of the purchase price. There are no minimum personal funds required and the entire down payment can be gifted!
Another great feature of a HomeReady loan is that it allows co-borrower flexibility. All borrowers do not have to reside in the home. This means parents who don’t plan on living in the home but want to help their child buy a house, can be co-borrowers on the loan. A HomeReady loan can be used to purchase or refinance a condo, townhouse, PUD, and 1-4 unit primary residence.
The Home Possible Loan and Fannie Mae’s HomeReady Loan are quite similar. Both offer a great option for those who are low to moderate income and need a low-down payment. A 3% minimum down payment is required and the entire amount can be gifted.
A key difference, however, is that if you are buying a multi-unit home, Fannie Mae’s HomeReady program will require at least 3% of the down payment to come from your own personal funds. The Home Possible program does not require this, allowing you to purchase a multi-unit without personally contributing to the down payment
The HomeOne program is geared toward first-time homebuyers. A first-time homebuyer is defined as not having owned property in the three years prior to the loan application. This loan is a good option for borrowers who have just a little saved but make more money than the income limits set by the HomeReady or Home Possible Loans. The HomeOne program only requires 3% down, but unlike other low-down payment conventional programs, you are not bound by income limits and geographic locations! The property must be your primary residence. Eligible property types include single family homes, PUDs (Planned Unit Developments) and Condos
This refinance loan offers the ability for low to moderate income borrowers take advantage of a better mortgage rate. All 1-unit primary residence property types are eligible, including single family homes, condos, PUDs and manufactured homes. And, if a property appraisal is required, you’ll receive a $500 credit to help cover the cost!
For homeowners that want to refinance for a better rate or lower monthly payment, but have little to no equity, the Enhanced Relief Refinance loan is a great option! This loan program is designed to help people whose Loan to Value ratio (LTV) is too high for a traditional refinance, or for mortgages that are underwater. Unlike other mortgage relief programs, you can use this option more than once, if at least 15 months has past since you closed your current mortgage loan. There is no income restriction and both primary residence and non-owner-occupied properties are eligible.
You are about to begin the mortgage loan application
- Applying on the MiMutual Mortgage Online Loan Application is quick, easy, and secure! The loan application will take about 25 minutes to complete.
- Once your application is submitted, you can log back into the MiMutual Mortgage Online Loan Application to securely upload requested documents, view your loan status, and communicate with your mortgage team.
- If you have questions, reach out to your MiMutual Mortgage Loan Officer.
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