Summary

A conventional loan is a mortgage that is not guaranteed or insured by any government agency such as the Federal Housing Administration (FHA), Department of Veterans Affairs (VA), or the US Department of Agriculture (USDA). Because they are not government insured, they usually require a minimum 20% down payment in order to avoid the need for private mortgage insurance. Some lenders have created special conventional programs that would require a reduced down payment (as little as 3% down) without the need to carry private mortgage insurance.

Advantages to Conventional Loans

  • Flexible Loan Terms - Loan periods ranging from 10 to 30 years provide you with the flexibility of creating a mortgage with a payment that works for your budget.
  • Fixed and Adjustable Rates - Choose a rate that will best align with your short term or long term mortgage goals.
  • Less Paperwork Involved - When compared to government insured mortgage products such as FHA and VA, conventional loans often require less documentation which could reduce your stress and speed up the overall mortgage process from start to finish.

Conventional Loan Requirements

In order to obtain a conventional mortgage, you will either be looking to purchase a home in the near future or refinance a home that you currently own. If you are looking to make a new home purchase, the first step of this process is to get pre-approved. If you are looking to refinance your home, the requirements will differ slightly from a purchase. Speaking to one of our licensed loan officers will give you the education you need to make an informed decision so you can get your current mortgage refinanced.  

Conventional Loan Options

  • Conforming Loan - The most common conventional loan product, these loans are called conforming because they conform to the guidelines set by Fannie Mae and Freddie Mac. They are designed for loan amounts up to $424,100 in most areas and up to $636,150 in some high-cost areas.
  • Nonconforming/Jumbo Loan - Designed for loan amounts that exceed the conforming loan limits. These loans sometimes come with added requirements that would otherwise not be required on conforming loans due to their increased loan size. Loans in this category start at the conforming loan limit of $424,100 and go upwards of $5,000,000.
  • Portfolio Loan - These loans can fall in both the conforming and non-conforming categories. Some smaller/private lenders may decide to be less strict when it comes to certain requirements that would otherwise be required on their conforming and non-conforming loan counterparts. Speak to one of our licensed loan officers and they can help you determine if this type of loan would be right for you.

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