Conventional loans are among the most sought-after mortgage options for homebuyers. Unlike loans backed by the government—such as FHA, VA, or USDA loans—conventional loans are offered through private lenders without government insurance. This structure provides borrowers with increased flexibility and a wider range of options, especially for those with strong credit and a reliable income.
Lower Total Costs: A solid credit score and a sizable down payment can help you lock in a lower interest rate, reducing the overall cost of your mortgage.
Versatile Property Options: Conventional loans can fund various property types, including primary homes, vacation properties, and investment real estate.
No Upfront Mortgage Insurance: These loans don't require an upfront mortgage insurance payment, allowing for lower closing costs.
Higher Loan Limits: Conventional loan limits are adjusted annually, offering greater flexibility in areas with higher housing costs.
Conventional loans generally require a minimum down payment of 3% to 5% of the home's purchase price. That said, making a down payment of 20% or more allows you to avoid private mortgage insurance (PMI).
If your down payment is under 20%, you'll typically be required to pay for private mortgage insurance (PMI), which safeguards the lender in case of loan default. The good news is that PMI can be canceled once your loan-to-value ratio (LTV) drops to 78%.
Conventional loans are subject to a maximum loan amount determined by the Federal Housing Finance Agency (FHFA). In 2025, the conforming loan limit for single-family homes in most regions is $802,650. If your loan amount exceeds this limit, you may need to explore jumbo loan options.
Your credit score is influenced by various factors, including the types of credit you use (such as credit cards, student loans, or auto loans), the length of your credit history, your credit utilization, and your payment reliability.
Conventional loans usually have stricter credit requirements than government-backed options. A minimum credit score of 620 is typically needed to qualify.
To qualify for a conventional loan, you need a stable income that can be verified with documents like pay stubs, tax returns, and W-2 forms.
Lenders look for a consistent employment history of at least two years. If you're self-employed, you'll need to show two years of successful self-employment through tax returns and other financial records.
We will evaluate your income to ensure you have a stable and sufficient income to cover the monthly mortgage payments. Typically, your debt-to-income (DTI) ratio should be below 50%
The conventional mortgage process generally takes about 30 to 60 days to complete, depending on a variety of factors.
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