Wisconsin Conventional mortgages
Wisconsin Conventional mortgages remain the most common home loans in Madison and most of Wisconsin. These mortgage loans are also referred to as conforming loans. They conform to the Fannie Mae and Freddie Mac lending guidelines. These popular mortgages are available at Stampfli Mortgage.
The Wisconsin Conventional Mortgage Advantage
Fixed Rate Mortgages
Just as the name implies, a fixed rate simply means the interest rate remains the same for the life of the mortgage. This is the most common type of home loan in Wisconsin. A fixed rate mortgage offers the security of knowing your interest rate and monthly payments will not sky-rocket over time. Stampfli Mortgage offers competitive interest rates and the mortgage advisors are dedicated to finding you the best overall deal.
Adjustable Rate Mortgage (ARM)
Unlike the Wisconsin fixed rate mortgage, the Wisconsin ARM home loans have an interest rate that can fluctuate over time. There is a fixed period (often 3, 5, or 7 years), followed by an annual interest rate adjustment. Some people like this option because the initial interest rate may be lower than a fixed rate mortgage. Others do not like to take the risk of an uncertain market. Your knowledgeable mortgage advisor at Stampfli Mortgage can help you decide which option is right for you.
Conventional Mortgage Guidelines
There are several specific guidelines for Fannie Mae and Freddie Mac mortgage loans. These guidelines help lenders avoid risk. Lenders use these standard guidelines to determine if an application is approved or denied. Common guidelines for Wisconsin conventional mortgages include (but are not limited to):
- The loan amount must be less than or equal to $647,200 in the state of Wisconsin.
- The minimum FICO credit score allowed is 620, however, better credit scores earn better interest rates.
- The allowable debt ratio is generally 36% with some exceptions. Debt ratio refers to the percent of your gross monthly income that is applied to your monthly payments. This includes mortgage related expense as well as additional credit (auto, credit cards, student or personal loans, etc.)
- The minimum down payment is usually 5%, however, you can avoid mortgage insurance (PMI) by putting at least 20% down. You can potentially put as little as 3% down under certain circumstances. Reach out to one of our mortgage loan advisors today to see if you qualify!
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Options to Consider
There are several options to consider when you are looking into a conventional mortgage. It’s important to understand the advantages and disadvantages of each type of loan product. Whether you’re a first time homebuyer or a seasoned homebuyer, the choices can be difficult to weed through. You will need to decide if fixed rate or adjustable rate is best for you. You will need to determine and decide how much of a down payment to put down. The mortgage can be structured in different ways depending on individual needs. Having an experienced mortgage advisor at Stampfli Mortgage explaining the options can give you just the edge you need to make the best decision.