Conventional loans are any type of mortgage loan that is not insured by a government entity as part of a specific program. This loans generally offer lower costs than other loan.
Conventional loan is a mortgage loan that get from a private non-government lender. Private lenders can set the loan terms, eligibility, interest rates, down payment & more.
Some conventional loans can be guaranteed by two government-sponsored enterprises, Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac).
Conventional loans are not for everyone. People with established credit and stellar credit reports who are on a solid financial footing usually qualify for mortgages.
You'll generally need a credit score of at least 620 to qualify for a conventional loan, though a score that's above 740 will help you get the best rate.
For 2023, the loan limit for single-family home is $726,200. However, Alaska, Hawaii and other high-cost areas have higher loan limits, ranging up to $1,089,300.
It depends on some factors, including borrower’s financial profile, assets, size of down payment, terms of loan, its length, its size & whether interest rate is fixed or adjustable.
Minimum down payment for conventional loan can be as low as 3% of sales price. Down payment depends on several factors, including sales price & borrower's qualifications.