What is a Conventional Loan?
Conventional Loans are the most common type of home loan, probably due to their many benefits – They generally have lower interest rates, more flexible loan terms, and fewer restrictions about what type of home you can buy. However, unlike FHA or VA Loans, Conventional Loans are not issued or guaranteed by the government, but are instead backed by private lenders. This means your lender is responsible for your loan if you stop making payments, which is why lenders often have stronger qualification requirements for Conventional Loans. If you’re interested in getting a Conventional Loan, remember that they:
- Require a higher down payment (3-5% minimum, 10-20% preferred)
- Require a higher credit score (620 minimum, 700+ preferred)
- Require the buyer to pay Private Mortgage Insurance (unless you paid a 20% down payment)
If you think a Conventional Mortgage may be right for you, you can submit an application here! In the meantime, if you have any questions about Conventional Loans, please don’t hesitate to reach out to one of our Loan Officers for help.