Conventional Loan

Make Homeownership a Reality

Conventional loans are the most sought-after mortgage option for homebuyers due to their flexibility and affordability. Qualified applicants can secure a mortage with low down payment, making their dream of homeownership a reality. Explore our competitive rates and expert guidance to find the perfect home loan for you.

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  • Lending in MI, OH, TN, FL, CO, MN, & PA
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How it works

Discover why a Conventional Loan might be the perfect choice for your home purchase. Our expert team helps you navigate the process, ensuring you understand your options and feel confident in your decision.
1
Start by discussing your financial details and potential home purchase. We’ll pull your credit report and present various loan options tailored to your financial situation.
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Once pre-approved, confidently search for homes within your budget. We’ll arrange an appraisal to determine the value of your chosen property and begin the underwriting process.
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We’ll gather all necessary documentation and finalize your loan terms to ensure a seamless closing. You’ll receive an affordable mortgage and the keys to your dream home.

Unlike government-backed loans, such as FHA or VA loans, conventional loans adhere to guidelines set by entities like Fannie Mae and Freddie Mac. For homebuyers, this means a smoother approval process based on credit scores. Borrowers with good credit can enjoy flexible down payment options, lower closing costs, and competitive interest rates. While a lower credit score won’t disqualify you from a conventional loan, it may require different conditions, such as a higher down payment.

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The top benefits of conventional loans

Low down payment

Qualified borrowers can secure their loan with a down payment as low as 3%

Variety of loan terms

Conventional loan term options include 15 or 30-year length loans and fixed or adjustable-rate mortgages.

Inexpensive closing costs

The conventional loan has fewer fees to close in comparison to government-sponsored loans.

Get a stable and straightforward mortgage loan

Conventional loans adhere to the guidelines set by Fannie Mae and Freddie Mac, ensuring transparency and reliability. With no hidden fees or penalities, you get a simple, affordable mortgage. Enjoy the peace of mind that comes with a stable monthly payment.

  • Credit Score: Typically 620 or higher gets the best rates, however, each lender will have their own requirements.
  • Debt-to-Income Ratio: Max 50% shows stable income for managing your loan Provide documentation for verification
  • Down Payment: 3% minimum, but may increase for first-time buyers, second homes, or those with a lower credit score
  • Term length options
  • Private Mortgage Insurance (PMI): Required if the down payment is less than 20%, and disappears when you reach 20% equity (80% loan-to-value ratio)

Conventional purchase loan FAQs

Is a conventional loan better than an FHA loan?

Choosing between a conventional loan and an FHA loan depends on your unique situation and homebuying needs. Conventional loans often offer lower interest rates and more flexibility but require stronger qualifications. FHA loans are easier to qualify for, especially for borrowers with lower credit scores, but they come with stricter terms and potentially higher costs.

What is the lowest down payment for a conventional loan?

The lowest down payment required for a conventional loan is typically 3% but this depends on your financial situation. Lenders may require more based on your debt-to-income (DTI) ration and credit score. Additionally, the size of your down payment affects your monthly payment. A down payment of less than 20% will require your to pay private mortgage insurance (PMI), which adds to your monthly costs.

How long does it take to get approved for a conventional home loan?

The approval time for a conventional home loan depends on how quickly you and your lender can communicate and submit the necessary documents. It’s crucial to choose a reliable and transparent lender. Typically, the approval process takes between 30 to 60 days, but it can be longer depending on your buying situation.

What is the DTI ratio maximum for a conventional loan?

Typically, the maximum debt-to-income (DTI) ratio a lender will accept for a conventional loan is 45-50%.

Can you refinance a conventional loan?

Yes, there are many options available for refinancing a conventional loan. Typically, it’s recommended to have at least 20% equity built up before refinancing. Some lenders may have specific rules about when you can refinance if you originally used them to buy the house. Borrowers can apply for a rate-and-term refinance to lower monthly payments and secure a better interest rate, especially if their financial situation improves after purchasing the home. Additionally, a cash-out refinance option allows you to tap into your homes equity for a lump sum payout for major expenses.

See if you qualify for a conventional purchase loan

When you’re ready to purchase a home, a conventional loan can help you afford a mortgage. Tell us about your situation and you’ll be on your way to securing the perfect home loan. Start your journey to homeownership with a reliable and afforable conventional loan today.