Conventional or conforming loans refer to most mortgages not backed by the federal government. These loans follow the terms and conditions set by Fannie Mae and Freddie Mac, government-sponsored institutions that are the largest purchasers of mortgages in the United States.
A conventional mortgage comes with stricter approval standards than government loans, so it’s generally best for borrowers that have a higher credit score, stable employment and income, and a debt-to-income ratio of less than 45%.
A common misconception about conventional mortgages is that a 20% down payment is required. However, down payment requirements may vary based on your situation. A lower down payment of 3% is possible in combination with paying for private mortgage insurance (PMI), which is included in your monthly mortgage payment.
A conventional loan could be your best bet for a mortgage if you’re a borrower with higher credit. By having a higher credit score, you may be able to take advantage of additional conventional loan benefits, like competitive pricing, no mortgage insurance if you put at least 20% down, or the option of a lower down payment in combination with mortgage insurance.
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Texas Mortgage Banker Disclosure – Figure: 7 TAC 81.200(c) “CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A MORTGAGE BANKER OR A LICENSED MORTGAGE BANKER RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550. THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED MORTGAGE BANKER RESIDENTIAL MORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.”
205 ILCS 635/2-9 Posting of license
The license of a licensee whose home office is within the State of Illinois or of an out-of-state licensee shall be conspicuously posted in every office of the licensee located in Illinois. Out-of-state licensees without an Illinois office shall produce the license upon request. Licensees originating loans on the Internet shall post on their Internet website their license number and the address and telephone number of the Commissioner. The license shall state the full name and address of the licensee. The license shall not be transferable or assignable. A separate certificate shall be issued for posting in each full-service Illinois office.
Licensee shall post on their internet web site the address and telephone number of the IDFPR. James R. Thompson Center
IDFPR-Residential Mortgage Banking
100 W. Randolph, 9th Floor
Chicago, Illinois, 60601
Tel: (844) 768-1713