If you’ve been following my blog, you know that I’ve been spending some time explaining particular home loans over the past couple of weeks. One that I’ve focused on is the Conventional 97, because it’s a great opportunity for first time home buyers and may not be around much longer.  The Conventional 97 loan shares similar aspects to other home loans, in that it does revolve  around a maximum debt to income ratio. Those using all of their own money for the down payment cannot exceed a ratio of 45%. Applicants accepting a gift as part of their down payment cannot surpass 41%.

The debt to income ratio is calculated by dividing your total amount of monthly debts into your total monthly income. Approval time for the Conventional 97 loan should be no longer than any other loan, but does vary by lender. This program is not like those created to boost the housing market and currently does not expire, but as we have seen over the last few weeks, change is occurring throughout the mortgage industry.

Not all lenders offer the Conventional 97 loan, but we do, so give me a call if you’d like to know more information. If you are a first time borrower, this is likely going to be your best option for a low down home loan. If you already own a home and would like to refinance or learn more about the process of finding the right mortgage, I’d love to share what I know or click here to read more in this series.