Conventional Mortgage Loans

Conventional loans are mortgage loans not insured by the government, such as FHA, VA, or USDA loans. They typically adhere to the lending guidelines set by Fannie Mae or Freddie Mac. These loans often offer better rates, terms, and lower fees compared to other loan types. However, they generally require borrowers to have good-to-excellent credit, reasonable monthly debt obligations, a down payment of 5-20%, and a reliable monthly income. Conventional loans are ideal for borrowers with excellent credit and at least a 5% down payment. Various loan terms are available.

Down Payment Requirements for Conventional Loans

For purchase transactions, conventional loans require a down payment of at least 5-20% of the home's purchase price. For refinance transactions, most lenders require at least 10% equity in the property.

Eligible Property Types

Most conventional loan programs allow you to purchase single-family homes, warrantable condos, planned unit developments, and 1-4 family residences. These loans can be used to finance a primary residence, second home, or investment property.