Learn About a Conventional Loan
A conventional loan is a mortgage not insured or guaranteed by the federal government, unlike FHA, VA, and USDA loans. This means the lender assumes the risk of the loan, requiring borrowers to meet certain eligibility criteria and financial requirements. If you're considering buying a home, read on to see if a conventional loan is a good option for you.

What is a Conventional Loan?
A conventional loan is a mortgage originated and funded by private lenders such as banks, credit unions, and mortgage companies. These loans are not insured or guaranteed by the government, meaning the lender assumes the risk. Conventional loans can be used to purchase or refinance a home or investment property. There are two types of conventional loans: conforming and non-conforming.
Who is Eligible for a Conventional Loan?
To qualify for a conventional loan, you typically need:
- Good Credit: A credit score of at least 620, though higher scores are often required.
- Stable Income: Proof of income through pay stubs, W-2s, and tax returns.
- Low Debt-to-Income Ratio: A manageable level of debt compared to your income.
What are the Benefits of a Conventional Loan?
- Higher Loan Amounts: Borrow more money compared to government-backed loans, as there are no set loan limits.
- Lower Interest Rates: Conventional loans often have lower interest rates, saving you money over the life of the loan.
- No Mandatory Mortgage Insurance: If you put down at least 20% of the home's purchase price, you can avoid mortgage insurance, reducing your monthly payments.
What are the different types of Conventional Loans?
- Fixed-Rate Mortgages: Offer stable monthly payments with a set interest rate for the life of the loan.
- Adjustable-Rate Mortgages (ARMs): Start with lower initial interest rates that can adjust over time.
- Jumbo Loans: Designed for higher-priced homes that exceed the conforming loan limits.
Ready to Learn More?
For more information or to start your application, contact MORTGAGEinc today, info@mortgage-inc.com!