Conventional Loans
Conventional loans are mortgage loans that are not insured or guaranteed by the government. These loans adhere to the guidelines set by Fannie Mae and Freddie Mac and are ideal for borrowers with strong credit and stable income.
Key Features of Conventional Loans
Competitive Rates
Conventional loans typically offer competitive interest rates, especially for borrowers with excellent credit scores.
Low Down Payment Options
Down payments as low as 3% for qualified first-time homebuyers, with standard options at 5%, 10%, and 20%.
Flexible Terms
Choose from a variety of loan terms, including 15, 20, and 30-year options, with fixed or adjustable rates.
Benefits & Requirements
Benefits of Conventional Loans
- No upfront mortgage insurance premium
- PMI is cancellable once you reach 20% equity
- Higher loan limits compared to FHA loans
- Faster closing times in many cases
- More property type options (condos, investment properties)
General Requirements
- Credit score of 620 or higher (higher scores qualify for better rates)
- Debt-to-income ratio typically below 45%
- Down payment as low as 3% for qualified first-time homebuyers
- Private mortgage insurance (PMI) required for down payments less than 20%
- Stable employment and income history
Conventional Loan Options
We offer a variety of conventional loan options to meet your specific needs.
Mariana and her team at GetTheMortgage.com made the conventional loan process so smooth for us. As first-time homebuyers, we had a lot of questions, and they were always patient and thorough with their explanations. We got a great rate and closed on time without any hiccups!
Frequently Asked Questions
What's the difference between conventional, FHA, and VA loans?
Conventional loans are not insured or guaranteed by the government, while FHA loans are insured by the Federal Housing Administration and VA loans are guaranteed by the Department of Veterans Affairs. Conventional loans typically require higher credit scores but offer more flexibility in terms of property types and loan amounts.
What credit score do I need for a conventional loan?
Most lenders require a minimum credit score of 620 for conventional loans. However, to qualify for the best interest rates, a score of 740 or higher is typically needed. The higher your credit score, the better terms you'll likely receive.
How much of a down payment do I need?
Conventional loans offer down payment options as low as 3% for qualified first-time homebuyers. Standard down payment options include 5%, 10%, and 20%. If you put down less than 20%, you'll typically need to pay for private mortgage insurance (PMI) until you reach 20% equity in your home.
What is private mortgage insurance (PMI)?
Private Mortgage Insurance (PMI) is insurance that protects the lender if you stop making payments on your loan. PMI is typically required for conventional loans with down payments less than 20%. Unlike FHA loans, PMI on conventional loans can be canceled once you reach 20% equity in your home, which can save you money over the life of your loan.
How long does it take to close on a conventional loan?
The typical closing time for a conventional loan is 30-45 days from application to closing. However, this timeline can vary based on your financial situation, the property being purchased, and current market conditions. Working with an experienced loan officer can help ensure a smooth and timely closing process.
Ready to Get Started with a Conventional Loan?
Our team at GetTheMortgage.com is ready to help you find the right conventional loan for your needs. Apply now to begin your homeownership journey.
All loans subject to credit and property approval. Rates, fees, and terms are subject to change without notice. Not all products are available in all states or for all amounts. Other restrictions and limitations apply. First Community Mortgage, Inc. NMLS# 629700 | Mariana Rawlins, VP/Branch Manager, NMLS# 1873354 | Equal Housing Lender.