ServicesConventional Loans
Conventional Loans in Cedar Park
A conventional loan is often the lowest long-term cost for borrowers with steady income and solid credit. We price it against your real numbers, set a closing timeline the appraisal and underwriting can actually meet, and tell you the same day if a date has to move.
How conventional financing works and when it makes sense
Conventional means the loan has no government backing from FHA, VA or USDA. Most of these mortgages are written to Fannie Mae and Freddie Mac guidelines, and those guidelines set the credit score floor, the debt-to-income ceiling and the minimum down payment. Loan amounts at or below the conforming limit get the strongest pricing. Above that limit the loan becomes a jumbo, with tighter rules on reserves and money down.
Borrowers who do well here tend to have a score in the mid-600s or better, a debt-to-income ratio that clears automated underwriting, and either 20 percent to put down or a plan to pay PMI until they get there. PMI is a monthly charge that protects the lender when the down payment is small. Unlike the FHA premium, it can come off once your equity is high enough.
A lower score or thin savings can tip the math toward an FHA loan. Veterans and service members should price a VA loan first. We put the options next to each other so your choice rests on cost, not habit.
What we handle on a conventional loan
Pre-approval with documents reviewed
We pull credit, read your pay stubs, W-2s and bank statements, and run the file through automated underwriting before we issue a pre-approval letter. A letter backed by reviewed documents holds up better when a seller's agent calls to check it.
PMI pricing compared
PMI cost depends on your score and your loan-to-value ratio. We show how the monthly figure changes at 5, 10 and 15 percent down, so you can see where an extra bit of savings pays off and where it does not.
Rate lock timed to your contract
A lock that expires before closing costs money to extend. We match the lock period to your contract date and leave a margin for appraisal or title delays.
Purchase and refinance
We write conventional loans for purchases, rate-and-term refinances and cash-out refinances. Texas has its own rules for cash-out on a homestead, including a 12-day waiting period after required disclosures, and we build that into the schedule from day one.
Condition tracking through closing
When the underwriter issues conditions, you get a plain list of what is needed, why, and the date it has to be in to keep closing on track.
When conventional financing fits you best
- Scores at 680 and above
- Conventional pricing rewards a strong score more steeply than FHA pricing does. Past about 680, a conventional payment including PMI often comes in under an FHA payment with its upfront and annual premiums.
- You expect to keep the loan for years
- You can ask to drop PMI at 80 percent loan-to-value, and it ends on its own at 78 percent on the original schedule. FHA premiums frequently last as long as the loan does.
- Income documented on W-2s
- Underwriters average variable pay such as overtime and bonuses across two years. Steady, well-documented income lets the file move without extra rounds of questions.
- A second home or rental purchase
- FHA and VA financing is limited to a primary residence. Conventional loans also cover second homes and investment properties, though they ask for a larger down payment.
- Your rate sits well above today's market
- Refinancing into a new conventional loan can cut the rate, or drop PMI if rising values around Cedar Park have lifted your equity past 20 percent.
From first call to closing day
- 1
First call: rate quote and pre-qualification
We start with a short conversation about what you earn, what you owe, what you have saved and the purchase price you are aiming for. You hang up with a rate quote and an honest read on how much you are likely to qualify for.
- 2
Application and pre-approval
You send your documents, and we pull credit and run the file through automated underwriting. Most delays at this stage come from missing pages, so we name the exact statements and forms we need.
- 3
Contract, appraisal and rate lock
After you sign a contract, we order the appraisal and lock your rate. You get the visit window the appraiser commits to, and we call when the report arrives, whether the value lands above, at or below the price.
- 4
Underwriting and conditions
The underwriter reviews the complete file and issues conditions. We send them as one list with due dates, and if any item pushes the schedule, you and your agent hear from us that day.
- 5
Clear to close and signing
Under federal rules, the Closing Disclosure has to be in your hands a minimum of three business days ahead of signing. In that gap we sit down with you and check each figure on it against your Loan Estimate, so the numbers at the title office are the ones you planned for.
What sets your conventional rate and closing costs
Your rate and closing costs come from a short list of inputs, and each one can be named and measured. We show every one on your Loan Estimate, so you can see how the numbers shift if one input changes.
- Credit score band
- Fannie Mae and Freddie Mac apply loan-level price adjustments based on score bands. Climbing into the next band can lower both your rate and your PMI premium.
- How much you put down
- Each dollar you bring to closing shrinks the loan compared with the property's value. That ratio drives the pricing adjustments and the size of the PMI premium. Reach 20 percent down and PMI is no longer required.
- Property and occupancy type
- A condo, a two- to four-unit building, a second home or a rental each carries extra pricing adjustments compared with a single-family primary residence.
- Lock length and points
- A longer lock period costs more. Discount points buy the rate down, and we show the month you break even so you can judge whether that fits how long you expect to keep the loan.
Conventional loan questions
- Do I really need 20 percent down?
- No. Certain conventional programs let qualifying first-time buyers put down just 3 percent, and plenty of borrowers put down 5. Anything under 20 percent means paying PMI. We lay out the monthly difference so you can decide how much cash to keep in reserve.
- How long does a conventional loan take to close?
- Most of the timeline depends on how quickly your documents arrive and when the appraiser can finish the report. We set a closing date after we have reviewed your file and the appraisal schedule, not before. If something slips, we call you the same day with the new date and what caused it.
- How do I get PMI removed later?
- When your balance falls to 80 percent of the original value, you can send your servicer a written request to cancel it, as long as your payments have been on time. It ends automatically at 78 percent. Some servicers will also consider a new appraisal if values have gone up.
- Can I use gift money for the down payment?
- Yes, if it comes from a relative or another eligible donor. Underwriting needs a signed gift letter and records showing the money moving into your account. We explain those papers at the start so the gift does not stall the file.
- Is conventional better than FHA for me?
- With a strong score and at least 5 percent down, conventional usually comes out ahead. With a lower score, FHA often wins. We price both on the same call so you can compare the monthly payment and the total cost over time.
Find out what a conventional loan costs you
Tell us your income, savings and target price, and we will give you a rate quote and a realistic timeline to closing. We work with borrowers in Cedar Park, Leander, Round Rock and nearby.