Conventional loans are one of the most popular types of mortgage options available to homebuyers. Unlike government-backed loans (such as FHA, VA, or USDA loans), conventional loans are offered by private lenders and are not insured by any government agency. This gives borrowers more flexibility and options, particularly if they have good credit and stable income.
Conventional loans require a down payment of at least 3% to 5% of the purchase price.
However, putting down 20% or more can help you avoid paying private mortgage insurance (PMI).
If your down payment is less than 20%, you’ll likely need to pay for private mortgage insurance (PMI). This insurance protects the lender in case you default on the loan. However, PMI can be removed once your loan-to-value ratio (LTV) reaches 78%.
Conventional loans have a maximum loan amount set by the Federal Housing Finance Agency (FHFA). For 2025, the conforming loan limit for single-family homes in most areas is $802,650. Loans exceeding this amount may require a jumbo loan.
Your credit score is determined by factors such as the types of credit you have (ie. credit cards, student loans, auto loans, etc.) how long you’ve had them, how much credit you're using, and how well you pay your bills.
Conventional loans typically require a higher credit score compared to government-backed loans. We look for a minimum credit score of 620.
The conventional mortgage process typically takes around 30 to 60 days from start to finish, depending on various factors.
Your journey to homeownership begins with knowledge and ends with the keys to your dream home in hand. Let’s take the first step today and turn your homeowning dreams into reality. Work with us today!