What is a conventional loan?

A conventional loan is a mortgage that is not guaranteed or insured by any government agency such as FHA, VA, or USDA. Conventional loans are either conforming or non-conforming. Conforming mortgages are required to conform to underwriting guidelines and loan limits set by Fannie Mae or Freddie Mac,  whereas non-conforming mortgages have loan amounts higher than the loan limits set by Fannie Mae / Freddie Mac.

WHO CAN TAKE ADVANTAGE OF CONVENTIONAL LOANS?

Conventional loans are great for many home buyers because of their faster home loan process, low costs, and added flexibility. When applying for a conventional loan, you must meet three initial requirements:

  1. Be able to make a down payment
  2. Meet the minimum FICO credit score (often 620 or above)
  3. Prove a stable income

Another benefit to taking out a conventional loan is the flexibility they provide for different types of local properties. Eligible properties for conventional loans include single-family homes, condominiums, multi-unit properties, and planned unit developments.

So, if you have a decent credit score and available funds to make a down payment on an eligible property, it is likely you qualify for a conventional loan.

TIPS FOR TAKING OUT A CONVENTIONAL LOAN

Most importantly: RESEARCH. Before taking out a loan, make sure to speak with a licensed Loan Officer about the perfect loan for you, and look into mortgage loan mistakes. Some of the most common mistakes people make when applying for a conventional loan is not checking their credit beforehand and ignoring the real expenses of homeownership.

Contact CostPro Lending Team today for any further information or questions about conventional loans!

Fannie Mae® is a registered trademark of Fannie Mae.
Freddie Mac® is a registered trademark of Freddie Mae.

Disclaimer:
This communication is for informational purposes only, this is not a commitment to lend. Individual buyer's financial circumstances may be different and may result in different interest rates, costs, and payments. All programs are subject to change or cancellation at any time and without notice. Please consult your licensed Loan Originator to learn more about mortgage products, your eligibility, and ask for an official Loan Estimate before choosing your loan.

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