Conventional loan
A conventional loan is a mortgage that is not backed by a government program, usually written to Fannie Mae and Freddie Mac guidelines. It often suits borrowers with good credit, and its mortgage insurance can come off as equity grows.
Buyers and homeowners with steady, documented income and a good credit history.
What a lender will ask for
- Income a lender can verify, and a credit history reviewed against the program's guidelines. Credit counts for more in the pricing than it does on an FHA loan.
- A down payment. A smaller one is possible, and below a set level it brings private mortgage insurance with it.
- Funds for closing costs and, on some loans, reserves left over after closing.
- A loan amount within the conforming limit for the county. Above that limit, the loan is a jumbo.
- An appraisal confirming the property's value.
What it offers
- Private mortgage insurance can usually be removed once you have built enough equity, unlike the mortgage insurance on most FHA loans.
- It can be used for a primary home, a second home or an investment property.
- With good credit it is often the most cost-effective option, and we set it beside FHA and VA so you can see whether it is.
What to weigh up
- Credit history counts for more in the pricing than on a government-backed loan, so a lower score can cost noticeably more.
- Private mortgage insurance adds to the monthly cost until it comes off.
- Guidelines on debt, credit and documentation can be stricter than FHA's.
Related loan programs
Start with a pre‑qualification request
Tell us what you want to do and where, and we come back with options compared across multiple wholesale lenders. A pre-qualification request starts it, and nothing is a commitment until a lender has reviewed your file.