What is a conventional loan?
A conventional loan is a mortgage loan that is not insured or guaranteed by the government. Conventional loans can have a fixed interest rate or an adjustable interest rate, with typical fixed rate loans having a term of 15 or 30 years.
Borrowers must typically meet three requirements in order to qualify for a conventional loan:
- Down Payment. The standard down payment for a conventional loan is between 5% and 20% of the home’s value. A borrower may be able to put down as little as 3%, but this is typically only available to first-time home buyers.
- Typically, your monthly mortgage payment combined with other monthly debt payments (such as car loans, student loans, and credit cards) may not exceed 45% of your gross monthly income.
- Credit Review. Our credit underwriting guidelines offer flexibility in determining if you qualify for a conventional loan. The best way to see if you qualify is to speak with one of our licensed loan officers.