Traditional Home Financing
Conventional Loans
Conventional Loans are one of the most popular mortgage options, offering competitive rates, flexible down payment options, and financing for different home types.
What is a Conventional Loan?
A Conventional Loan is a mortgage that isn't insured or guaranteed by the federal government (like FHA Loans, USDA Loans, and VA Loans). Instead, it follows lending guidelines established by Fannie Mae and Freddie Mac. This allows for more flexibility in the type of financing it provides and is what makes it a popular loan choice for many borrowers.
Highlights
Conventional Loan features
Conventional Loan limits
How much can I afford with a Conventional Loan?
Conventional Loan limits are set annually by the Federal Housing Finance Agency (FHFA). Limits vary by county, so if you're buying in a designated high-cost area, you might be able to secure a larger Conventional Loan than in other areas.
Private Mortgage Insurance
Understanding Conventional Loan Private Mortgage Insurance (PMI)
Private mortgage insurance (PMI) is typically required when you put less than 20% down on a Conventional Loan. It's usually included in your monthly mortgage payment and, unlike FHA mortgage insurance, may be removed once you've built enough equity and meet lender requirements. Key highlights:
- Required with less than 20% down
- Paid monthly in most cases
- May be removed later if eligible
Still not sure if it’s right for you?
If you’re still not sure if a Conventional Loan is right for you, we’d be happy to talk. Either contact us or get started on your preapproval and to see how much you can afford, and we can talk best loan fit after.
FAQ
Frequently Asked Questions
We’re here to help! Find answers to your everyday banking questions.
A conventional home loan is a mortgage that follows lending guidelines established by Fannie Mae and Freddie Mac rather than being insured or guaranteed by a government agency such as the FHA, VA, or USDA. Conventional home loans are one of the most common financing options for buying or refinancing a home.
No. While a 20% down payment typically eliminates the need for private mortgage insurance (PMI), many qualified borrowers are eligible for a Conventional Loan with a smaller down payment.
Credit score requirements vary by loan program and borrower profile. In general, borrowers with stronger credit may qualify for more favorable interest rates and loan terms. Your loan officer can help determine which Conventional Loan options you may qualify for.
Yes. Many Conventional Loan programs allow eligible gift funds to be used toward your down payment and, in some cases, closing costs. Gift funds must meet applicable program guidelines and documentation requirements.
Yes. Depending on your down payment amount and loan program, sellers may be able to contribute toward eligible closing costs. Seller concessions are subject to Conventional Loan guidelines and maximum allowable limits.
Closing costs typically include lender fees, appraisal and title services, prepaid taxes and insurance, recording fees, and other expenses associated with completing your mortgage. The exact amount varies based on your loan, property, and location. Your Loan Estimate will outline your expected closing costs before you close.
The timeline can vary depending on the property, documentation, appraisal, and underwriting process. Getting pre-approved early and providing requested documents promptly can help keep your loan on track.
No. Conventional Loans are available to both first-time and repeat home buyers. They can also be used by eligible borrowers purchasing a second home, vacation home, or investment property.
