Conventional Loan

A conventional loan is a mortgage not insured or guaranteed by the government, such as the FHA or VA. It is typically offered by private lenders and follows guidelines set by Fannie Mae and Freddie Mac.

To qualify for a conventional loan, lenders typically look for a good credit score, stable income, low debt-to-income ratio, and a down payment of at least 3% to 20% of the home's purchase price.

Conventional loans often come with competitive interest rates, flexible terms, and the possibility of avoiding mortgage insurance with a higher down payment.

The minimum down payment for a conventional loan varies but is typically between 3% to 20% of the home's purchase price, depending on factors like credit score and loan amount.

Yes, many conventional loan programs allow borrowers to use gift funds for some or all of their down payment, as long as certain documentation requirements are met.

PMI is insurance that protects the lender in case the borrower defaults on the loan. It is typically required for conventional loans with a down payment of less than 20% of the home's purchase price.

PMI can be removed from a conventional loan once the borrower reaches 20% equity in their home, either through payments or appreciation or by refinancing the loan.

Yes, borrowers with conventional loans can refinance to take advantage of lower interest rates, change loan terms, or access equity in their homes.

Some lenders and government-sponsored entities offer special programs or incentives for conventional loan borrowers, such as down payment assistance programs or grants for first-time homebuyers.

To apply for a conventional loan, you must gather financial documentation, such as pay stubs, tax returns, and bank statements, and submit a loan application to a lender. The lender will then review your application, verify your information, and determine if you qualify for the loan.