Home Purchase
Conventional Loans
A straightforward loan for qualified buyers. Conventional financing offers competitive rates, flexible terms, and no upfront mortgage insurance requirement.
Smart Financing. Personal Service.
How It Works
How a Conventional Loan Works
Conventional loans are the most widely used mortgage product in the country. They offer a range of term options and competitive pricing for borrowers with solid credit and stable income.
1
Competitive Rates for Strong Borrowers
Conventional loans reward good credit with some of the most competitive rates available, especially for borrowers with scores above 700.
2
Flexible Down Payment Options
Put as little as 3% down as a first time buyer or 5% for most other purchases. A 20% down payment eliminates the need for private mortgage insurance entirely.
3
No Upfront Mortgage Insurance
Unlike FHA loans, conventional loans do not require an upfront mortgage insurance premium. PMI is only required when your down payment is under 20% and can be removed once you reach 20% equity.
4
Wide Range of Property and Use Types
Conventional loans can be used for primary residences, second homes, and investment properties — something government backed loans do not always allow.
Basic Eligibility Requirements
Credit Score: 620 minimum, higher scores get better rates
Down Payment: As low as 3% for qualified buyers
Debt to Income: Up to 50% typically, varies by profile
Employment: Stable 2 year history
Appraisal: Required to confirm home value
Property: Primary residence, second home, or investment property
Location: Texas, Florida, Minnesota, or Colorado
Pros and Cons
Is a Conventional Loan Right for You?
Conventional loans work well for a wide range of buyers, but they are best suited for borrowers with solid credit and stable income. Here is what to weigh.
The Advantages
- No upfront mortgage insurance premium, unlike FHA loans.
- PMI can be removed once you reach 20% equity in the home.
- Available for primary residences, second homes, and investment properties.
- Wide range of term options including 10, 15, 20, and 30 year loans.
- Competitive rates for borrowers with strong credit profiles.
- Can be used for purchases, rate and term refinances, and cash out refinances.
The Tradeoffs
- Higher credit score requirements than FHA or VA loans.
- PMI is required with less than 20% down, adding to your monthly cost.
- Stricter debt to income and asset requirements than government backed loans.
- Less flexibility for borrowers with recent credit events like bankruptcy or foreclosure.
- Investment property purchases require a higher down payment and carry higher rates.
Who It's Best For
Conventional Loans Work Best For...
Conventional financing is a strong fit for buyers and homeowners who meet standard qualification guidelines and want flexible options without government loan restrictions.
Strong Credit Borrowers
Borrowers with a solid credit history who want competitive rates and the widest range of loan term and property type options.
Move-Up Buyers
Homeowners selling their current home and purchasing their next one who want a straightforward loan without government program restrictions.
Investment Property Buyers
Buyers purchasing a second home or investment property, as conventional loans are one of the few options available for non primary residences.
Common Questions
Frequently Asked Questions
Straight answers to the questions we hear most often.
What is a conventional loan?
A conventional loan is a mortgage not insured by a government agency. It follows guidelines set by Fannie Mae and Freddie Mac and is the most common loan type for home purchases and refinances.
What credit score do I need for a conventional loan?
Most conventional loans require a minimum credit score of 620, though a stronger score will give you access to better rates and terms.
How much do I need to put down?
As little as 3% down is possible for qualified first time buyers. Most borrowers put down 5% to 20% depending on their situation and goals.
Do conventional loans require mortgage insurance?
Private mortgage insurance is required if your down payment is less than 20%, but it can be removed once you reach 20% equity. There is no upfront mortgage insurance premium like FHA requires.
What is the loan limit for a conventional loan?
Conventional loan limits are set annually by the Federal Housing Finance Agency and vary by county. Loans above the limit are considered jumbo loans and follow different guidelines.
Not Sure Where to Start?
Let's Figure It Out Together.
Whether you're ready to apply or just exploring your options, we're here to help. No pressure, no obligation, just honest guidance.