Conventional Mortgage Loans

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Find the Right Mortgage Loan: Conventional Loans

For buyers looking for a straightforward path to homeownership, a conventional loan is often the best fit. These loans, sometimes called “conforming loans,” tend to come with lower rates and more flexible repayment options compared to other types of mortgages. From first-time buyers to seasoned homeowners or investors, conventional loans are a popular option for nearly every stage of life.

With this type of loan, you can take advantage of key benefits like low, fixed rates for stable monthly payments, flexible terms to fit your budget, and options that allow for a low or no down payment. If you’re able to put 20% down, you won’t need to pay private mortgage insurance (PMI), lowering your costs even further. Conventional loans make it easier to move forward with confidence toward your homeownership goals.

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Low, Fixed Rates

The lowest interest rates available help keep your long-term costs down and your monthly payment steady.

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Low or No Down Payment

Qualified buyers may be able to put down as little as 3%, making it easier to purchase a home without years of saving.

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Serviced Locally

Your loan is managed right here by people in your community. That means faster responses and personalized support.

Tailored to Fit Your Financial Goals

Conventional loans stand out because they give borrowers more control over how their financing is structured. You can customize everything from your loan term to your interest type, giving you the chance to match your mortgage to your short- and long-term goals. That flexibility makes it easier to prioritize what matters most—whether that’s keeping monthly payments low, paying off your home sooner, or minimizing overall interest costs.

Unlike government-backed programs, conventional loans also give you the ability to adjust your approach as your financial situation evolves. You can refinance down the road to secure a better rate, shorten your term, or even tap into the equity you’ve built to fund future goals like home improvements or education. It’s a loan that grows with you, not against you.

Confidence That Lasts Beyond the Closing

Because conventional loans reward financial readiness, they often lead to stronger long-term savings. Borrowers with solid credit and reliable income can qualify for some of the most competitive interest rates available, helping reduce costs over the life of the loan. That predictability offers peace of mind—knowing your payments will stay consistent and your home will continue building value.

In addition to savings, conventional loans offer the simplicity and transparency many borrowers prefer. There are no surprise fees or complex requirements—just a clear path to homeownership with terms you can understand and trust. For members who appreciate having options, stability, and control, a conventional loan is more than just a mortgage—it’s a long-term financial strategy.

Frequently Asked Questions

A loan that is not insured or guaranteed by a government agency (like the FHA, VA, or USDA).
It is the most common type of home loan and typically conforms to the loan limits set by the Federal Housing Finance Agency (FHFA),

Conventional loans have stricter qualification requirements, especially for credit score and debt-to-income ratio. They require Private Mortgage Insurance (PMI) if the down payment is less than 20%, but PMI can be canceled once 20% equity is reached.
FHA loans (Federal Housing Administration) are government-insured, making them easier to qualify for with lower credit scores and smaller down payments (as low as 3.5%). However, they require a Mortgage Insurance Premium (MIP), which often lasts for the life of the loan unless the borrower refinances.

Generally, there is no strict federal minimum waiting period, but lenders often require you to make at least six monthly payments on the original loan.
If you’re doing a rate-and-term refinance, you typically must show that the loan is seasoned (you’ve had it for a certain period, often six months to a year) to demonstrate repayment history.

Most lenders require a minimum credit score of 620. Higher scores (680+) often result in better interest rates.

The minimum down payment can be as low as 3% for first-time homebuyers or those who meet low-to-moderate income requirements, though the standard is often 5%.

Typically, your DTI must be 45% or less, though some lenders may allow up to 50% for borrowers with excellent credit and significant cash reserves.

Do I have to pay Private Mortgage Insurance (PMI) on a conventional loan?
- Yes, if your down payment is less than 20% of the home’s purchase price.
When can I stop paying PMI on my conventional loan?
- You can typically request cancellation of PMI once your loan-to-value (LTV) ratio reaches 80% (i.e., you have 20% equity).
- Lenders are legally required to automatically terminate PMI when your LTV reaches 78%.

Pros: Flexible terms, ability to cancel PMI, potentially lower long-term cost than FHA.
Cons: Stricter eligibility (credit and down payment), higher upfront cost if PMI is required.

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Conventional Mortgage Loans