Conventional Lending

A conventional home loan is a loan not insured by the federal government. Typically, these loans are used for primary residences, second homes, and vacation properties. Conventional loans require down payments. Many lenders will offer these loans with “as low as 3% down”, but the thing to remember is in order to not pay premium mortgage insurance you need at least 20% down. In most cases the limit on a conventional loan is $424,100 for a single family dwelling, though this can vary state to state. Credit score is another important factor to consider when deciding if a conventional loan is the way to go for you. A minimum of 680 is required as a credit score to qualify for a conventional loan. Frannie May and Freddie Mac use a loan level price adjustment (LLPA) which means the lower your credit score the higher your rate. For the full LLPA matrix click here. A conventional loan can be used for financing on condos as well but there are a few guidelines that must be met on the property to qualify. If you are interested in using this financing for a condo your lender and real estate agent can help you determine eligibility. These loans can be very beneficial to many people when applying for financing although sometimes may not offer the best rates. That is why it is so important to have a knowledgeable lender on your side. For a list of my recommendations see our lenders page.

Click here for more information from Lending Tree on conventional loans.