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