Conventional home loans offer competitive interest rates, flexible terms, and low down payment options for qualified buyers and homeowners. They are a popular choice for purchasing or refinancing primary homes, second homes, and even investment properties, giving you predictable payments and long term stability.
Conventional home loans are mortgages that are not insured or backed by the government, making them one of the most flexible and widely used financing options. With low down payment requirements, competitive interest rates, and fewer restrictions, they are ideal for buyers with strong credit.
Conventional loans are great for first-time and repeat buyers, those with good credit and stable income, and anyone looking for customizable loan terms. They also work well for homeowners refinancing for better rates or tapping into home equity.
A lender evaluates your credit score, income, and debt-to-income ratio to determine your eligibility. These loans can be fixed-rate or adjustable-rate and offer term lengths from ten to thirty years, giving you flexibility in repayment.
Conforming loans meet Fannie Mae and Freddie Mac guidelines and offer competitive rates. Non-conforming loans, such as jumbo loans, are designed for higher-priced homes that exceed standard loan limits. Fixed-rate loans provide stable payments with a locked-in interest rate, while adjustable-rate mortgages (ARMs) start with a lower initial rate and adjust over time.
Conventional loans allow down payments as low as three percent for qualified buyers. With a twenty percent down payment, private mortgage insurance is not required, reducing long-term costs. These loans offer competitive interest rates, flexible term options, and can be used for primary homes, second homes, and investment properties.
If you have good credit, stable income, and want lower long-term costs, a conventional loan could be your best option. Whether you’re buying a new home or refinancing, it offers more lender flexibility and fewer fees than government-backed loans.
Jon Shrum, President of KMC Financial and Team Shrum, helps buyers and homeowners secure conventional financing with competitive rates and smart terms. He compares options across lenders, explains PMI and down payment choices, and makes sure the loan fits your long term goals. With clear communication and integrity, Jon makes the process smooth from start to close.
Conventional home loans are one of the most common mortgage options for buyers and homeowners with strong credit and stable income. These FAQs explain how conventional loans work, down payment options, credit requirements, costs, and when this loan type may be the right fit for your home purchase or refinance.
A conventional loan is a mortgage that is not backed by the government. It follows guidelines set by Fannie Mae and Freddie Mac and is widely used for buying or refinancing primary homes, second homes, and investment properties.
Some conventional programs allow as little as 3 percent down for qualified buyers. Putting down 20 percent or more may help you avoid private mortgage insurance and lower your monthly payment, but many buyers choose lower down payment options to keep more cash on hand.
Conventional loans typically favor borrowers with good to excellent credit. While minimum scores may be lower depending on the program, higher credit scores often help you qualify for better interest rates and terms.
Private mortgage insurance, or PMI, is usually required when you put less than 20 percent down. PMI protects the lender, not you, but the good news is it can often be removed once you reach enough equity in your home.
Yes. Conventional loans can be used for second homes and investment properties, though down payment and credit requirements are typically higher than for a primary residence.
Conventional loans have conforming loan limits set each year. If your loan amount exceeds these limits, you may need a jumbo loan instead. Limits vary by county, especially in higher cost areas.
It depends on your situation. Conventional loans may offer lower long term costs for borrowers with strong credit and larger down payments, while FHA and VA loans may be better for buyers with lower credit scores or limited savings. Comparing options helps you choose the best fit.
