Conventional Mortgages

Fixed-Rate Home Loans

Conventional mortgages are the most common type of home loan and provide you the ability to have a fixed-rate mortgage for 10, 15, 20, or 30 years. A conventional mortgage can be used for a primary home, second home and investment properties.

 

Conventional Loan Qualification Criteria

Ability to Repay

Borrowers must show they have the ability to repay the loan based upon their current income.

Credit Score

Typically, a credit score of 640 is the minimum to obtain a conventional loan, and 740 is the minimum score you need to get the best rates available.

Debt-to-Income Ratios

One of the main factors when determining your ability to afford a loan is your debt-to-income (DTI) ratio. Your DTI ratio is the relationship between your monthly debt payments and gross monthly income. This ratio needs to be reasonable to qualify for a conventional mortgage loan, meaning the amount you spend on monthly payments needs to be “reasonable” compared to your monthly income. Typically, your ratios need to be less than 43%, but it is possible for them to be higher.

Down Payment

Conventional mortgage loans typically need larger down payments than required with government-backed loans. A typical down payment for a conventional loan is 3%-20%. If the down payment amount is lower than 20%, private mortgage insurance (PMI) is required.

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