How do I get a conventional 97 loan?

Written by - January 10, 2023

How to Get a Conventional 97 Loan: An Overview

If you're looking for a way to purchase a home with a low down payment, a conventional 97 loan may be a good option for you. This type of loan is backed by Fannie Mae and allows borrowers to put down as little as 3% of the home's purchase price. In this article, we'll explain how to get a conventional 97 loan, the eligibility requirements, and the pros and cons of this type of loan.

Eligibility Requirements for a Conventional 97 Loan

To qualify for a conventional 97 loan, you'll need to meet certain eligibility requirements. These include:

• A credit score of at least 620
• A debt-to-income ratio of no more than 43%
• A minimum down payment of 3%
• The home must be your primary residence

If you meet these requirements, you may be eligible for a conventional 97 loan. Keep in mind that each lender may have their own requirements, so it's important to shop around and compare rates and terms to find the best fit for your needs.

Steps to Getting a Conventional 97 Loan

If you're interested in getting a conventional 97 loan, here are the steps you'll need to take:

Pros and Cons of a Conventional 97 Loan

Like any type of loan, a conventional 97 loan has both pros and cons. Here are some of the key advantages and disadvantages of this type of loan:

Pros:

• Low down payment: One of the biggest advantages of a conventional 97 loan is the low down payment requirement of just 3%.
• No upfront mortgage insurance: Unlike some other types of loans, a conventional 97 loan doesn't require upfront mortgage insurance, which can save you money.
• Competitive interest rates: Because a conventional 97 loan is backed by Fannie Mae, it often comes with competitive interest rates.

Cons:

• PMI requirement: While a conventional 97 loan doesn't require upfront mortgage insurance, it does require private mortgage insurance (PMI) if you don't put down at least 20%.
• Limited to certain properties: Conventional 97 loans are only for single-family homes and condos, so if you're looking to purchase a multi-family home, this may not be the right type of loan for you.
• Potentially higher costs: Because a conventional 97 loan requires a lower down payment, you may end up paying more in the long run due to higher interest rates and PMI costs.

In Conclusion

Getting a conventional 97 loan can be a great option if you're looking to purchase a home with a low down payment. To qualify for this type of loan, you'll need to meet certain eligibility requirements and go through the steps of finding a lender, getting preapproved, finding a home, and closing on the loan. Before deciding if a conventional 97 loan is right for you, be sure to weigh the pros and cons and compare rates and terms from different lenders.

If you're looking for a trusted mortgage company that offers conventional 97 loans, consider Mortgage Brokers Pro . Our experienced lenders can help guide you through the process and find the right loan for your needs. Contact us today to learn more.

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