Conventional Home Loans
Known as the standard in loan programs, conventional loans are designed to help home buyers find their ideal mortgage plan with simplicity.
The Basics of Conventional Home Loans
What is a conventional loan?
Conventional home loans are those not guaranteed or insured by government agencies (like the Federal Housing Administration, the Department of Veterans Affairs, or the U.S. Department of Agriculture). Conventional mortgages are not guaranteed, so any required mortgage insurance is usually paid by the home buyer.
Advantages of a conventional loan
Depending on your specific situation, conventional loans can offer lower interest rates, a variety of down payment options, varying term lengths for fixed-rate mortgages, and reduced mortgage insurance (MI). If you pay MI on a conventional loan because you put down less than 20%, you typically have the option to cancel the MI when the principal balance on the loan hits approximately 20% equity in the property.
Getting Started on Your Conventional Loan
Who is eligible for a conventional loan?
Conventional home loans are a great option for many people, especially those with a strong credit history, steady income, and a larger down payment amount. But you don’t have to check all those boxes to qualify for a conventional home loan! The great thing about conventional loans is that they often offer flexibility on the requirements based on your circumstances.
Conventional loan requirements
Requirements for a conventional loan depend on your credit and financial history. Some of the main items your lender will consider are your credit score, debt-to-income ratio, income stream, and cash reserves. Ultimately, your lender needs to determine that you have the funds and financial foundation to pay the loan back. Since conventional loans aren’t backed by the government, the lender assumes more risk in the event of a default.
Start your journey home
Finding the path to home ownership is simple with a loan expert from Better Built Mortgage Group. Our loan officers are ready to help you finance your home ownership dreams.