Conventional Loans

A conventional loan is a mortgage that is not guaranteed or insured by any government agency, such as the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), or the Department of Agriculture (USDA). Instead, these loans are typically backed by private lenders and often sold to government-sponsored enterprises like Fannie Mae or Freddie Mac.

Conventional mortgages are the most common type of home loan and offer some of the most competitive interest rates and flexible term options available on the market. They can be used for primary residences, second homes, and investment properties.

Best For Which Buyers?

• Strong Credit: Borrowers with a credit score of 620 or higher. The best rates typically go to those with scores above 740.
• Stable Income: Buyers with a reliable income history and a manageable debt-to-income (DTI) ratio.
• Down Payment Flexibility: Those who can put down at least 3% (for first-time buyers) to 20% to avoid Private Mortgage Insurance (PMI).
• Property Investors: Buyers looking to purchase a second home or investment property (which FHA and VA loans do not allow).

Key Benefits

• • Cancelable Private Mortgage Insurance (PMI) once you reach 20% equity.
• • Flexible term options (10, 15, 20, or 30 years).
• • No upfront mortgage insurance fee (unlike FHA).
• • Can be used for various property types.
• • Higher loan limits than many government-backed loans.

What is the minimum down payment for a conventional loan?

Do I have to pay mortgage insurance?

What are the conventional loan limits?

Can I use a conventional loan for an investment property?