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The Texas Mortgage Pros

Conventional Conforming Loans in Wichita Falls

Your Straightforward Path to Homeownership in the Heart of North Texas

Wichita Falls has a down-to-earth feel that bigger cities often lack. With Sheppard Air Force Base providing steady activity and healthcare and education supporting the workforce, neighborhoods still have a friendly vibe where neighbors wave to each other. Home prices remain fairly affordable whether you’re near Midwestern State University, toward Burkburnett, or in established spots like Tanglewood. For these prices, conventional conforming loans fit well. They offer clear terms without being too strict and affordable costs without surprise fees.

What Is a Conventional Conforming Loan?

A conventional loan is a mortgage that isn’t backed by the federal government. No FHA, no VA, no USDA. It’s offered by private lenders, and the terms are generally guided by standards set by Fannie Mae and Freddie Mac, the two government-sponsored enterprises that buy most mortgages on the secondary market.

Because these loans aren’t government-insured, they require more from you as a borrower: stronger credit, stable income, and a reasonable down payment. But the trade-off can be worth it. With good credit, you’ll often get lower interest rates, more flexible loan terms, and can avoid some ongoing fees that come with government loan programs.

Conforming vs. Non-Conforming: What's the Difference?

Here things split into two types: conventional conforming and conventional non-conforming loans. The difference mainly comes down to size and eligibility.

  • A conventional conforming loan meets the loan limits and underwriting standards established by Fannie Mae and Freddie Mac. Most homes in Laredo fall within these limits, which means conforming loans are common and typically offer competitive interest rates and flexible down payment options.
  • A conventional non-conforming loan, often referred to as a jumbo or portfolio loan, exceeds the local conforming loan limit or falls outside certain agency guidelines. These loans are useful if you are purchasing a higher-priced property or if your financial situation requires more customized underwriting. Non-conforming loans often require stronger credit, larger down payments, and additional reserves. In return, they provide greater borrowing capacity and flexibility for unique scenarios.
For most Laredo buyers, conforming loans suffice. Non-conforming loans suit luxury properties or complex income situations.
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Eligibility Requirements for a Conventional Loan in Wichita Falls

Lenders have varying requirements, but generally, you need the following to qualify:

  • Credit Score: Conventional conforming loans start at 620, though higher scores bring better rates and smoother approvals. Strong credit can also reduce the cost of mortgage insurance if you put less than twenty percent down.
  • Down Payment: Ranges from 3% to 20%, depending on the program and whether you’re a first-time buyer. The standard down payment is 5% of the purchase price. If you can put down twenty percent, you avoid private mortgage insurance entirely.
  • Debt-to-Income Ratio: The DTI measures comfort. Lenders compare your projected housing payment plus other monthly obligations against your gross income. Typically kept below 45%. That means your monthly debts, including your new mortgage payment, shouldn’t take up more than 45% of your gross monthly income.
  • Income: Lenders want to see that your income is reliable and likely to continue. If you are salaried, you will provide pay stubs and W 2 forms. If you are self-employed, which is common in Laredo’s business community, you may need two years of tax returns and a current profit-and-loss statement. Consistency matters more than perfection.
  • Assets and Reserves: You will document funds for your down payment and closing costs. In some cases, especially with non-conforming loans, lenders may require additional cash reserves to show financial stability after closing.
  • Appraisal and Property Standards: The property must meet appraisal and condition standards; lenders want assurance that it’s worth what you’re paying. In Laredo, most single-family homes qualify without difficulty, provided there are no major structural or safety concerns.
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The Benefits of a Conventional Loan in Wichita Falls

The biggest advantage is long-term cost control. There is no upfront mortgage insurance premium, which keeps closing costs manageable. If you do pay PMI, it can be removed later, allowing your payment to decrease as equity grows. That feature alone can save significant money over the life of the loan.

Flexibility is another major benefit. You can choose a fixed-rate mortgage for stability, or an adjustable-rate mortgage if you expect to refinance or move within several years. Some buyers use temporary rate buydowns to make the first year or two more comfortable financially. Seller concessions, within program limits, can help reduce out-of-pocket closing costs.

Conventional loans are also widely accepted by sellers and real estate agents. A strong conventional pre-approval signals reliability, which can strengthen your offer in competitive situations. Even in a moderate market, that confidence matters.

Finally, conventional financing allows for a variety of property types. Primary residences, second homes, and certain investment properties can all qualify. If you are thinking about long-term

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FAQs About Conventional Loans in Wichita Falls

Q: Can I use a conventional loan to buy an investment property?
A: Yes, you can. Conventional loans are one of the few options available for investment or second homes, though the requirements are typically stricter.

Q: How does a conventional loan compare to an FHA loan?

A: FHA loans are great for buyers building credit or saving for a smaller down payment, but conventional loans tend to have lower long-term costs and offer more flexibility once your credit profile strengthens.

Q: What is the main difference between conforming and non-conforming loans?

A: Conforming loans follow agency guidelines and loan limits, while non-conforming loans exceed those limits or use customized underwriting for unique situations.

Q: Is PMI permanent on a conventional loan? 

A: No, and that’s one of its better qualities. Once you reach 20% equity through payments or appreciation, you can request PMI removal. At 22%, lenders are required to automatically cancel it.

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Apply for a Conventional Loan in Wichita Falls

If you’re ready to take the next step toward buying a home in Wichita Falls, or you want to talk through your options with someone who knows this market, give us a call. We’ll walk you through the numbers, answer your questions honestly, and help you figure out whether a conventional conforming loan is the right fit for where you are right now.

Call us today at (877) 280-4833. We’re here to help you move forward with confidence.

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