What is a Conventional Loan?

A conventional home loan is a mortgage that is not insured by the federal government, so their terms are more flexible than USDA, FHA or VA loans. Offering low interest rates, they’re a great fit for customers with good credit and financial stability who can afford a down payment.

Why would a Conventional Loan be the best choice for you?

Simplicity – Without Federal Government-mandated procedures to deal with, Conventional loans are simple to apply and qualify for.

Flexibility – With tons of options and customizable terms available, we can craft a conventional loan that perfectly aligns with your financial status and long-term goals.

Affordable Down Payments – Required down-payments can be set as low as 3% of the home cost, making Conventional Loans more attainable than ever.

Loan Interest Rates – By confirming our customers’ financial stability and credit score, we can offer amazingly pow interest rates.

What are the qualifications for a Conventional Loan?

For starters, you’ll need proof of income, two years of documented tax returns, and cash reserves to cover closing and additional costs.

Credit Criteria

You should also carry good credit (typically a FICO score of 620 or greater), and total debt that does not exceed 45% of your income.

Down Payment

You’ll also likely need to provide a down payment on the home (as low as 3%, but ideally 20% or more in order to remove the possibility of paying a monthly Mortgage Insurance tax.)

Mortgage Insurance

Mortgage insurance is an insurance policy that protects a mortgage lender or titleholder if the borrower defaults on payments, dies or is unable to meet the contractual obligations of the mortgage. One commonly-required insurance type is Private Mortgage Insurance (PMI).

Loan Limitations

As of 2019, that limit for most of the country is $484,350. That limit can go higher in counties where the housing costs tend to exceed the national average – up to $726,525 in some cases.