Conventional Loan

What is a Conventional Mortgage or Loan?

A residential conventional mortgage loan is a mortgage loan that is not backed by a government agency such as the Federal Housing Administration (FHA), the Veterans Administration (VA) or the United States Department of Agriculture (USDA).

Conventional loans come in all shapes and sizes and can be used to purchase primary residences, secondary homes and investment properties. Conventional loans usually require a higher credit score and a larger down payment than government-backed loans, but they offer some benefits that government-backed loans do not, such as the ability to cancel Private Mortgage Insurance (PMI) once you have 20% equity in your home.

Is Conventional Right for You?

If you are considering a conventional loan, it is important to speak with one of our loan specialists to see if you qualify and to compare the benefits and drawbacks of this type of loan against other types of loans.

We offer a no-hassle & easy quote without the formal application or credit check required. Just answer a few questions about your mortgage goals! We will review the information you provide with some recommendations and options from our team of experts!

Types of Conventional Loans

There are several types of conventional loans that you may come across as you compare lenders and mortgage options. Here are some of the most common ones and how they work.

Conforming Conventional Loans

Conforming conventional loans are loans that adhere to the standards set by Fannie Mae and Freddie Mac, including maximum loan amounts discussed above.

Jumbo Loans

Jumbo loans allow you to borrow more than the maximum lending limit for conforming loans. However, they typically require a higher credit score, lower debt-to-income ratio (DTI) and larger down payment.

Portfolio Loans

A portfolio loan is a conventional loan that a lender chooses to keep in its own portfolio rather than selling it on the secondary market. This option allows the lender to be more flexible than what the Fannie Mae and Freddie Mac standards allow, especially with credit scores and DTIs.

Amortized Conventional Loans

These loans are fully amortized, giving homebuyers a set monthly payment from the beginning to the end of the loan repayment period, without a balloon payment. Amortized conventional loans can have fixed or adjustable mortgage rates.

Adjustable-rate Loans

A fixed-rate mortgage loan has the same interest rate—and, therefore, the same monthly payment—throughout the life of the loan. With an adjustable-rate mortgage, however, you'll get a fixed interest rate for a set period, typically between three and 10 years. After that, your interest rate can adjust each year based on the current market rates.