A conventional loan is one that is provided by a private lender such as a bank or credit union. With a conventional loan, you get the money you need upfront and pay back the lender over the course of your mortgage. Conventional home loans typically require a down payment and good finances to secure the best terms. A conventional, or conforming, mortgage adheres to the guidelines set by Fannie Mae and Freddie Mac. It may have either a fixed or adjustable rate.
Is a conventional loan good?
What is the downside of a conventional loan?
Why do realtors prefer conventional loans?
- Minimum credit score of 620.
- Minimum down payment of 3-5%
- Debt-to-income ratio below 43%
- Loan amount within local conforming loan limits.
- Proof of stable employment and income.
- Clean credit history (no recent bankruptcy or foreclosure)