Conventional Home Loans in Oregon: 4 Common Questions Answered

Published:
January 27, 2018
Last updated:
November 29, 2023
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Taking out a mortgage in Oregon requires some knowledge in order to make sure you only commit to something you’re well-versed in. This article will answer some of the more common questions when it comes to conventional mortgages in Oregon.

If you’re going to buy a home in Oregon using a mortgage loan, one of your first choices will be whether to use a conventional home loan or a government-insured mortgage. Conventional loans are the most common financing option among borrowers.

Here are answers to four of the most frequently asked questions regarding conventional home loans in Oregon.

1. What is a conventional home loan?

In this context, a conventional mortgage loan is one that is not insured by the government. Some home loans are backed by government agencies, such as the Department Of Veterans Affairs (VA) or the Federal Housing Administration (FHA). A conventional home loan, on the other hand, does not receive any kind of backing or guarantee from the government.

In some cases, a conventional home loan in Oregon might be insured by a private mortgage insurer. This is often the case for borrowers who make smaller down payments and therefore have a higher loan-to-value ratio. But with a conventional loan, the insurance policy is provided by an insurer within the private sector — not by the government. That is the key distinction.

2. How do they compare to FHA and VA?

As mentioned, Oregon’s conventional home loans are the most popular financing option among borrowers. But the FHA and VA programs are commonly used as well.

Here are the differences:

  • A VA loan is guaranteed by the Department Of Veterans Affairs, and therefore gives borrowers a way to purchase a property with no down payment whatsoever. The program is limited to military members and veterans (and in some cases their spouses).
  • FHA home loans are insured by the Federal Housing Administration, which is managed by HUD. They require a down payment of at least 3.5%.
  • Conventional loans offer down payments as low as 3% for well-qualified borrowers.

Generally speaking, VA and FHA loans are easier to qualify for than conventional, because of the government backing. But a well-qualified borrower could use either option.

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3. How much can I borrow with this option?

From a size perspective, there are two different kinds of conventional home loans in Oregon. They are either conforming or jumbo, depending on the amount being borrowed.

  • Counties in Oregon is $766,550.
  • A jumbo loan, on the other hand, is one that exceeds the conforming limits for a conventional homeowner in Oregon.

Borrowers seeking a non-conforming jumbo mortgage loan must have a higher level of income, due to the larger amount being borrowed. The amount you can borrow will also depend on your existing debts and your monthly income. Please contact us if you would like to get pre-approved for a loan amount.

Check out our mortgage loan limit tool for conventional, FHA, and VA loans, as well as the 2024 conforming loan limits for Oregon.

4. What are the basic requirements for conventional mortgages in Oregon?

Mortgage lenders review a variety of factors when considering loan applications. These factors can include the borrower’s credit score, the size of the down payment, debt, and income level. These are some of the most important requirements for a conventional loan in Oregon.

A credit score of 600 or higher will generally put you in a good position to qualify for conventional mortgage financing. A manageable level of debt is important too. Lenders want to ensure that you are not taking on too much debt with the addition of a home loan.

Additionally, borrowers must demonstrate that they have the financial means to repay the loan obligation. Income is verified through a variety of documents, including bank statements, tax records, and pay stubs.

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Need a Mortgage Loan in OR?

If you need a mortgage, we can help. At Sammamish Mortgage, we offer a wide variety of mortgage programs and tools with flexible qualification criteria, including our Diamond Homebuyer ProgramCash Buyer Program, and Bridge Loans. We have been serving the entire state since 1992, as well as the broader Pacific Northwest region that includes Washington, Oregon, Colorado, and Idaho. Please contact us today with any financing-related questions you have.

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