Everything you Need to Know about Conventional Loans
The most common type of home loan is the conventional loan. These loans are perfect for borrowers with a strong credit history and the funds for a more substantial down payment. Conventional loans offer the ability to avoid the costs of mortgage insurance while also giving borrowers the option of fixed or adjustable rates.
What are conventional loan limits?
Is a conventional loan suitable for you?
What are the down payment requirements?
What is Private Mortgage Insurance?
What are the interest rates on a conventional loan?
What credit score is needed for a conventional loan?
Other requirements for a conventional home loan
How do conventional loans compare to other options?
Can first-time home buyers get a conventional loan?
The Basics of a Conventional Mortgage
The length of most conventional loans is 15, 20 or 30 years. To qualify, you will need a good credit score. The minimum score to be approved can vary from lender to lender, but a score of 620 is usually what you will need to be approved, and a score of 740 will help you secure the best rate possible.
Unlike other loans, a conventional mortgage could require a significant down payment. Most other loans require an initial payment of about 5%, but you can expect to put down up to 20% with a conventional loan. The amount varies and depends on your credit history. You will also be responsible for origination fees, appraisal fees and mortgage insurance.
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Loan Limits
There are two types of conventional mortgage loans - conforming and non-conforming.
Conforming loans follow guidelines set by Fannie Mae and Freddie Mac. The rules for these loans are based on the size of the loan. In 2021, home loans for single-family homes were limited to $548,250, while higher-cost areas held limits up to $822,375.
The most common type of home loan is the conventional loan. These loans are perfect for borrowers with a strong credit history and the funds for a more substantial down payment. Conventional loans offer the ability to avoid the costs of mortgage insurance while also giving borrowers the option of fixed or adjustable rates.
What are conventional loan limits?
Is a conventional loan suitable for you?
What are the down payment requirements?
What is Private Mortgage Insurance?
What are the interest rates on a conventional loan?
What credit score is needed for a conventional loan?
Other requirements for a conventional home loan
How do conventional loans compare to other options?
Can first-time home buyers get a conventional loan?
The Basics of a Conventional Mortgage
The length of most conventional loans is 15, 20 or 30 years. To qualify, you will need a good credit score. The minimum score to be approved can vary from lender to lender, but a score of 620 is usually what you will need to be approved, and a score of 740 will help you secure the best rate possible.
Unlike other loans, a conventional mortgage could require a significant down payment. Most other loans require an initial payment of about 5%, but you can expect to put down up to 20% with a conventional loan. The amount varies and depends on your credit history. You will also be responsible for origination fees, appraisal fees and mortgage insurance.
[download_section]
Loan Limits
There are two types of conventional mortgage loans - conforming and non-conforming.
Conforming loans follow guidelines set by Fannie Mae and Freddie Mac. The rules for these loans are based on the size of the loan. In 2021, home loans for single-family homes were limited to $548,250, while higher-cost areas held limits up to $822,375.