Conventional Home Loans

Mortgages are defined as either government-backed or conventional.

Government backed loans utilize Government agencies like the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) who insure home loans, which are made by private lenders. The insurance is paid for by fees collected from mortgage borrowers.

Mortgages not guaranteed or insured by these agencies are known as conventional home loans. Conventional loans are held and backed by the mortgage lender.


Conventional Loan Credit Requirements

Having a good credit score is essential to getting a conventional loan. You can expect lenders to require scores anywhere from 620 to over 700. The typical minimum credit score lenders require for conventional mortgages is 620-640.

Conventional Mortgage Benefits

Conventional Mortgage Disadvantages

  • Reserve funds are often required

  • 620 credit score requirement (higher than FHA)

  • Large down-payment 5%-20% (Unless you qualify for a Conventional 97 loan which requires a 3% down payment)

  • Higher interest rates

  • More difficult to qualify for than FHA

I will guide you through the various options on the market and help you find the right mortgage for you.