what are the requirements for a conventional loan?

45% is the maximum if your putting less than 20% down.. if your putting 20% or more down, it's possible to go a bit higher.. and Yes.. the rules are changing.. the government is making it MUCH MORE DIFFICULT for every day folks to qualify in the future.. there are a new set of rules coming that refer to "Qualifying Mortgage" or QM. These rules are being instituted by the new government agency called Consumer Financial Protection Bureau or CFPB. Its these rules that will prohibit the higher LTV's and lower down payments.. if your looking to purchase, you might want to get out there now before these rules take effect.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Current debt to income ratios are at 45% for a conventional loan with less than a 20% down payment.

Until Jan 10, 2014 on a standard conventional loan try to keep them under 45% - Jan 10 it will be limited to 36%. You currently only need 3% down but in Jan it is going to 20% down and for the most part you will want your score above 680. There are a couple other loan programs like Homepath that have broader parameters but your are limited to only those homes listed on the Homepath website. Bottom Line, if you are going to buy a house on a conventional loan do it before these stupid Qualified Mortgage Rules go into place on Jan 10, 2014.

Joe -- They are changing all the time. Give us a call, would be happy to speak with you one on one about this. Andrew

Hi Joe, the DTI will be based on whatever approves through the automated system which evaluates risk. The amount of reserves, funds left over after closing, the Down payment, your credit score all weigh into what the system will approve. The form of income you have may also be calculated differently, overtime, bonuses etc. Unfortunately, it is not a definite answer, many factors are involved; be an informed borrower and contact lenders. You should interview, discuss options and find the lender that you want to work with. The process is very cumbersome and you need to have full confidence. Good Luck!

Generally speaking, the requirements for all loans, including conventional are basically the same. Have a stable, provable source of income to safely afford the house. Have good credit, and a down payment. Conventional loans will allow for a credit score all the way down to 620, but you will pay dearly for that low score. Conventional also requires at least a 5% down payment. And finally, your debt to income ratio can not be too high. Conventional caps your debt ratio at 45%, but we also look at your front ration, which is what just the house alone would costs as a percentage of income. www.StPaul-Mortgage.com