Conventional Loans

    The most popular mortgage option with flexible terms and competitive rates

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    What is a Conventional Loan?

    A conventional loan is a mortgage that is not insured or guaranteed by the federal government. These loans typically offer competitive interest rates and flexible terms, making them an excellent choice for borrowers with good credit and stable income.

    Conventional loans conform to guidelines set by Fannie Mae and Freddie Mac, and they're available for primary residences, second homes, and investment properties.

    Key Benefits

    Lower interest rates for borrowers with good credit
    Down payment as low as 3% for first-time buyers
    Option to remove PMI once you reach 20% equity
    Available for various property types
    Flexible loan terms (15, 20, or 30 years)
    Higher loan limits than FHA loans in many areas

    Requirements

    Credit Score:Typically 620 minimum
    Down Payment:3% to 20%
    Debt-to-Income Ratio:Usually up to 43-50%
    Income Documentation:2 years of tax returns, pay stubs, W-2s

    Who Should Consider This?

    • • First-time homebuyers with good credit
    • • Borrowers with stable employment history
    • • Those who can make a down payment of at least 3%
    • • Buyers looking for flexible loan terms
    • • Anyone seeking competitive interest rates

    Important to Know

    PMI (Private Mortgage Insurance): If you put down less than 20%, you'll need to pay PMI, which protects the lender. The good news is PMI can be removed once you reach 20% equity through payments or appreciation.

    Conforming Loan Limits: Conventional loans have maximum loan amounts that vary by county. In 2024, the baseline conforming loan limit is $766,550 for most areas, with higher limits in high-cost areas.