Conventional Loans

Conventional mortgages are the most popular option for borrowers looking to purchase or refinance a home. People tend to choose this loan for a variety of reasons and may qualify for one depending on their financial situation. These loans are also called “conforming loans” because unlike other loans (such as FHAs or VAs), they aren’t backed and insured by the federal government. If you’re able to meet the income and credit requirements, conventional loans typically offer you more flexibility and a wider array of loan programs and terms. This loan is a great option if you’re able to make a higher down payment because you aren’t required to pay private mortgage insurance (PMI) if you put down 20% or more


How Do Conventional Loans Work / Who Do They Benefit The Most

Conventional loans work well for purchase or refinance transactions and are often used to finance primary homes, secondary homes, and investment properties. The terms and conditions of conventional loans are fully in line with guidelines created by the Fannie Mae and Freddie Mac agencies. Conventional loans are designed for customers with a higher credit score and stable employment history.


How To Qualify For a Conventional Loan

Conventional loans require a credit score of at least 620, and lenders prefer the borrower to have a low debt-to-income ratio. This ensures that the borrower is financially capable of paying back the debts they owe — making it less of a risk for the lender.

 Conventional Loan Benefits


Requirements for a Conventional Loan

·       Down Payments are typically between 5% to 25%

·       A credit score of at least 620 may be accepted

·       A debt-to-income ratio of no more than 45%

·       Property appraisal to verify the condition and value of the home

·       A credit score of at least 620