Caleb Adams
Licensed Mortgage Broker
Unlock Lower Rates and Broader Property Options with a Conventional Loan
The credit requirements for conventional loans are typically stricter, with lenders looking for a credit score of at least 620 or higher.
However, borrowers with excellent credit may be able to secure a lower interest rate and better terms on a conventional loan. Conventional loans can be used to purchase a variety of property types, including single-family homes, multi-unit properties, and condominiums.
Conventional loans are not backed by the government and are subject to the lender’s guidelines and underwriting standards.
Typically require a higher down payment of 5% to 20% of the purchase price
Credit requirements are typically stricter than FHA loans, with lenders typically looking for a credit score of at least 620
Borrowers with excellent credit may be able to secure lower interest rates and better terms on a conventional loan compared to an FHA loan..
Conventional loans offer options for fixed or adjustable interest rates
Conventional loans can be used to purchase a variety of property types, including single-family homes, multi-unit properties, and condominiums
Conventional loans do not require mortgage insurance if the borrower puts down at least 20% of the purchase price
Conventional loans offer options for refinancing, including cash-out refinancing and rate-and-term refinancing, which can help borrowers lower their monthly mortgage payments or access equity in their home.
Most conventional loans require a minimum credit score around 620, though a higher score typically unlocks better pricing. I look at your full picture, not just the number, so reach out and I can tell you where you stand today.
Conventional loans can go as low as 3% down for qualified first time buyers, with 5% and up being common for others. The right amount depends on your goals, so let us talk through what makes sense for you.
If you put down less than 20%, PMI is usually required, but it automatically drops off once you reach 20% equity. There are also strategies to avoid or reduce PMI that I can walk you through.
Conventional loans are not government backed and can offer more flexibility for borrowers with strong credit, while FHA loans have more lenient credit requirements but carry mortgage insurance for the life of the loan in most cases. I can help you compare both side by side for your situation.