A conventional loan is the most widely used mortgage in the country. It is not backed by a government agency, which means it follows guidelines set by Fannie Mae and Freddie Mac. If you have decent credit, stable income, and some money saved for a down payment, a conventional loan is often the most flexible and cost-effective option available.
At Lender Express, we work with multiple lenders to find you the best rate and terms for a conventional mortgage. We compare your options so you do not have to.
WHAT IS A CONVENTIONAL LOAN?
A conventional loan is a mortgage that is not insured or guaranteed by the federal government. Unlike FHA, VA, or USDA loans, conventional loans are funded by private lenders and sold to investors through Fannie Mae or Freddie Mac.
Because they are not government-backed, conventional loans typically require stronger credit and a slightly larger down payment. In return, they offer competitive interest rates, flexible loan amounts, and fewer restrictions on the type of property you can buy.
Conventional loans are available for primary residences, second homes, and investment properties. They can be used to purchase or refinance.
KEY BENEFITS
- Down payments as low as 3% for qualified buyers
- No upfront mortgage insurance premium
- Private mortgage insurance (PMI) cancels automatically once you reach 20% equity
- Available for primary homes, vacation homes, and investment properties
- Works with a wide range of property types
- Can be used for purchase or refinance
- Loan amounts available up to conforming limits and beyond with jumbo options
HOW IT WORKS
Here is a basic overview of how a conventional loan works from start to finish.
- Check your credit score. Most lenders require a minimum score of 620, though higher scores earn better rates.
- Get pre-approved. We review your income, assets, and debts to tell you what you can borrow.
- Find your home. Your real estate agent submits an offer on your behalf.
- Complete the loan application. We submit your file to the lender for underwriting.
- Close on your home. You sign final documents and receive the keys.
Before you start shopping, use our mortgage calculator to estimate your monthly payment and get a clear picture of what fits your budget.
WHO THIS LOAN IS BEST FOR
- Buyers with a credit score of 620 or higher
- Buyers who have saved at least 3% for a down payment
- Borrowers with a steady employment history
- Repeat buyers who have equity to use as a down payment
- Buyers purchasing vacation homes or investment properties
- Borrowers who want to avoid long-term mortgage insurance
BASIC REQUIREMENTS
These are general guidelines. Your specific qualifications will depend on the lender and loan program selected.
| Minimum Credit Score | 620 (higher scores qualify for better rates) |
| Down Payment | As low as 3% for primary residences |
| Debt-to-Income Ratio | Typically 45% or lower |
| Loan Limits | Up to $766,550 in most areas (2024 conforming limit); higher in high-cost counties |
| Property Types | Single-family, condo, townhome, multi-unit (2-4 units), second home, investment property |
| Mortgage Insurance | Required if down payment is less than 20%; cancels when equity reaches 20% |