Conventional Mortgages
A conventional mortgage is a loan that is not insured by FHA, guaranteed by the VA, or backed by USDA. Many conventional loans follow guidelines set by the government-sponsored enterprises, and terms vary by lender.
General potential benefits
- Widely available through many participating lenders
- Down payment requirements vary and may be lower than commonly assumed
- Private mortgage insurance may be removable once certain equity conditions are met
General considerations
- Credit and income review is typically more sensitive than with some government programs
- Private mortgage insurance may apply with a smaller down payment
- Guidelines and pricing differ between lenders
Common eligibility factors
- Credit history and score range
- Debt-to-income ratio
- Documented, verifiable income
- Down payment and reserves
- Property type and appraisal outcome
Possible costs
- Origination and lender fees
- Appraisal, title, and recording fees
- Prepaid taxes and homeowners insurance
- Private mortgage insurance where applicable
Questions to ask a mortgage professional
- Which loan programs am I likely to be eligible for, and why?
- What documentation will you need from me, and when?
- How do the estimated closing costs compare between programs?
- How would a change in my down payment affect my monthly payment?
- What would change if my credit profile improves before closing?
Readiness checklist
- Review your credit report from each major bureau
- Estimate a comfortable monthly payment, not just a maximum
- Gather two years of income documentation
- Confirm the source and seasoning of down-payment funds
Frequently asked questions
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This guide is educational. Eligibility factors described here are common considerations, not universal or guaranteed requirements. Nothing here is a loan offer, an approval, or a rate commitment. A licensed mortgage professional must verify actual terms.