Conventional 97% Financing

Planning for conventional 97% financing starts with understanding the loan amount in relation to the property value. The percentage describes loan-to-value: the loan amount compared with the property value used for the financing calculation. It does not mean that the same percentage of all closing costs is covered, and it does not establish approval. Ask which specific program and requirements apply to your borrower and property file.

Identify the proposed financing path

Ask the mortgage professional to name the program, intended loan purpose, occupancy, property type, and loan structure. If more than one option is discussed, keep separate notes for each. Fannie Mae’s loan-to-value options page distinguishes standard financing from HomeReady. That agency comparison does not determine your qualification or establish NorthStar’s available offerings.

Separate down payment from other costs

Prepare a list of savings and any proposed gift or assistance funds. Ask how each contribution must be documented and which costs it can cover. Include estimated closing charges, prepaid expenses, moving costs, and money you want to keep after closing. Request an estimate of borrower funds needed for the entire transaction rather than relying on the percentage in a product name.

Review the monthly payment structure

Ask about the loan term, interest-rate structure, mortgage insurance, and any costs that may change after closing. Include taxes, insurance, association charges, and maintenance in your own budget. If mortgage insurance applies, request its estimated cost and the conditions governing removal. Discuss what a different down payment would change, including the amount of savings remaining afterward.

Compare written scenarios consistently

  • Use the same proposed purchase price, property, and occupancy when comparing options.
  • Identify differences in loan amount, down payment, term, and rate-lock assumptions.
  • Compare lender charges, credits, mortgage insurance, and estimated cash to close.
  • Ask which figures are estimates and which conditions remain unresolved.
  • Consider how your expected time in the home affects the comparison.

The CFPB loan-offer comparison guide offers resources for assessing written offers. A calculator can organize questions, but it does not replace a lender’s current file review or written disclosures.

If income eligibility and affordable-program features are central to your questions, read the separate HomeReady preparation guide. Otherwise, start with purchase planning or contact NorthStar Funding with your budget and funds outline.

Sources checked October 12, 2026. General information only; not a commitment to lend or guarantee of terms. Current program, lender, borrower, and property requirements apply.