Conventional Loan

The Most Common Home Loan

A conventional loan is a mortgage that’s not backed by a government agency. A popular option among borrowers with good credit and stable income, a conventional loan allows for low down payment and purchase or refinance.

Conventional Loan Benefits

  • Minimum down payment of 3%
  • Fewer restrictions and limitations compared to government-backed loans
  • Ability to cancel private mortgage insurance once 20% equity is achieved
  • Higher credit scores may result in interest rate reduction
  • Faster loan processing
  • Flexible term length from 10 to 30 years
  • Applies to almost all property types

Conventional Loan Requirements

To qualify for a conventional loan, borrowers will complete a mortgage application and the lender will pull credit to verify their credit scores and history. Other factors that determine eligibility include:

  • Proof of income, available assets, and source of down payment
  • A minimum credit score of 620
  • A debt-to-income ratio less than 43%

Type of Conventional Loans

  • Fixed-Rate – Interest rate is fixed and never changes. 15 and 30-year terms available
  • Adjustable-Rate – Interest rate that is subject to change. 3, 5, 7 or 10-year terms available
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