Are you looking to buy in San Jose, CA? Learn about Conventional Fixed Rate Loans

Most people move to California for the weather –and who can blame them? If you are looking for a place where you can enjoy warm and dry summers along with cool and mild winters then San Jose is a great location to settle down. Before you go house hunting, get pre-qualified with a Santa Clara County mortgage broker to increase your chances of closing that deal.

San Jose is a seller’s housing market which means that the competition is tough when buying real estate. In such a hot market, it’s good to have a lender that you can trust. RAS Loans helps San Jose homebuyers get the best conventional loans that fit their needs.

Let’s take a look at why conventional fixed-rate loans are among the most popular loan types today.

What are conventional fixed-rate loans?

Most conventional loans are loans that comply with a set of eligibility requirements set by Fannie Mae and Freddie Mac. These types of loans are not insured or guaranteed by the government. 

Fixed-rate conventional loans have the same interest for the lifespan of the loan. This means that your monthly payment and interest won’t change. Fixed-rate mortgages are popular with buyers since they offer predictability and stability. The security and peace of mind you get from conventional loans, especially for first-time buyers are what make this one of the top choices today.

The main benefit of fixed-rate loans is the protection you get for sudden and significant increases in monthly payments if interest rates rise. This is one of the reasons why 85% of Americans choose fixed-rate mortgages over other types of mortgages in the market.

There are a variety of terms available for fixed-rate loans with 30, 20, and 15-year terms as the most common being offered. 30-year mortgages are one of the most popular choices.   

If you want to learn more, you can contact your San Jose mortgage broker for more details.

Conventional Loan Requirements

  • Down payment. In the past, conventional mortgages required larger down payments than other types of loans but 3% down is an option for qualified applicants. First-time homebuyers and those who are making a good income have a higher chance of getting approved for a 3% down program.

  • PMI. If you put down less than 20%, you need to pay for PMI or Private Mortgage Insurance. The cost of PMI is based on the loan type, credit score, and size of the down payment. The good thing about PMI is you can ask your lender to remove PMI when you reach 20% equity.

  • Property Types. Conventional loans are available for single-family units, townhouses, and multi-family units.

  • Income Requirements. DTI can’t be more than 43% as verified by tax returns, W2s, and pay stubs. Credit scores also need to be 620 or higher in most cases.

  • Loan Size. As of the writing of this article, the loan limits set by Fannie Mae and Freddie Mac are $647,200. 

If you feel like you meet all of the requirements mentioned and would like to apply for a loan you can talk with one of our loan officers to learn about current conventional mortgage rates in California.

Are Fixed-Rate Mortgages Good For Me?

With so many options available, picking the loan with the best fit can be tricky. 

At RAS Loans of San Jose, Ca., we guide you through the process to ensure you get the right loan to fit your needs and budget. Get in touch with our loan experts to know more.


* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.