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Conventional Mortgages

Traditional home loans with flexible terms and competitive rates

What is a Conventional Mortgage?

A conventional mortgage is a home loan that is not backed by a government agency like the FHA, VA, or USDA. These loans are offered by private lenders and follow guidelines set by Fannie Mae and Freddie Mac.

Flexible Down Payments

Put down as little as 3% or avoid PMI with 20%

Competitive Rates

Often lower rates than government-backed loans

No Loan Limits

Available for conforming and jumbo loan amounts

Quick Facts

Minimum down payment

620

Minimum credit score

43%

Maximum debt-to-income ratio

15-30

Loan term options (years)

Conventional Loan Options

30-Year Fixed

Rate: 6.75% - 7.25%

Monthly payment on $200K loan: $1,347

Most popular option with lower monthly payments

15-Year Fixed

Rate: 6.25% - 6.75%

Monthly payment on $200K loan: $1,789

Higher payments but significant interest savings

5/1 ARM

Rate: 5.95% - 6.45%

Monthly payment on $200K loan: $1,198

Lower initial rate, adjusts after 5 years

Qualification Requirements

Credit Score

620 minimum

Down Payment

3% - 20%

Debt-to-Income

≤ 43%

Employment

2 years stable

Pros and Cons

Advantages

Lower down payment options (3% minimum)
No mortgage insurance with 20% down
Competitive interest rates
Available for primary, secondary, and investment properties
Flexible loan terms (15, 20, 30 years)

Considerations

Higher credit score requirements than FHA
PMI required with less than 20% down
Stricter debt-to-income requirements
Larger down payment for best rates
No government backing or assistance programs