Conventional Loans Made Simple
Get clear, step-by-step guidance on conventional mortgages so you can move forward with confidence, whether you are buying your first home or your next one.
As your mortgage loan officer, I focus on helping you understand your options and choose a conventional loan that fits your long-term goals.
Why Homebuyers Work With Me
- Simple explanations in plain language
- Flexible options for many homebuyers
- Personalized guidance from start to finish
- Local insight into our housing market
What Is a Conventional Loan?
A conventional loan is a mortgage not backed by the government, offering flexible terms and lower long-term costs for qualified buyers.
Many homebuyers choose a conventional mortgage when they have strong credit, a steady income, and want flexibility in how they structure their loan.
Who Is a Conventional Loan Best For?
Every situation is unique, but conventional loans are often a good fit for homebuyers in the following situations:
- Homebuyers with a solid credit history
- Borrowers with steady income and employment
- Buyers who want to avoid long-term mortgage insurance costs
- People purchasing a primary residence, second home, or qualifying investment property
- Homeowners looking to refinance to adjust their term, rate structure, or remove mortgage insurance when eligible
Key Benefits of Conventional Loans
- Lower overall cost compared to FHA (in many cases)
- Opportunities to request removal of private mortgage insurance (PMI) when you reach sufficient equity under investor guidelines (15-20%)
- Flexibility for different property types and loan terms
- Options for different down payment amounts, depending on your goals and qualifications (3%+)
Conventional Loan Requirements
- Credit profile: Typically 620+
- Down Payment: 3%+
- Debt-to-income ratio (DTI): Up to 50% (Depends on program)
- Assets and reserves: Income and asset documentation required
Exact requirements vary
Down Payment & PMI
Private mortgage insurance (PMI) is a type of insurance that may be required on conventional loans when your down payment is below a certain percentage of the home’s value. (15-20% Down). PMI can be removed later (unlike FHA).
Conventional vs. FHA
Quick Comparison:
Conventional Loans
- Credit Flexibility:
- Moderate
- Down Payment:
- 3%+
- Mortgage Insurance:
- Removeable
- Best For:
- Strong credit
FHA Loans
- Credit Flexibility:
- More Flexible
- Down Payment:
- 3.5%
- Mortgage Insurance:
- Usually permanent
- Best For:
- Lower Credit
My role is to help you compare these options side by side so you can see how each one could affect your payment, cash to close, and long-term costs, then choose the path that best supports your goals.
Conventional Loan FAQs
How much do I need for a down payment on a conventional loan?
Down payment options can vary based on the type of property, how you plan to occupy it, and your qualifications. Some buyers choose a lower down payment to keep more cash on hand, while others prefer to put more down to reduce their monthly payment and potential mortgage insurance. I can walk you through scenarios tailored to your situation.
When is private mortgage insurance (PMI) required?
PMI is typically required when your conventional loan down payment is below a certain percentage of the home’s value. It helps protect the lender in case of default. The exact threshold and cost can vary, so we’ll review how PMI may apply to your specific purchase or refinance.
Can I use gift funds for my down payment?
Many conventional loan programs allow some or all of the down payment and closing costs to come from eligible gift funds, depending on the property type, occupancy, and loan structure. There are specific documentation rules, and I can guide you and your donor through what is needed.
Can I use a conventional loan for a second home or investment property?
Conventional loans are commonly used for second homes and certain investment properties when they meet investor guidelines. Down payment, reserve, and qualification standards may be different from those for a primary residence. I will help you understand what to expect based on the type of property you have in mind.
How long does the conventional loan process take?
Timelines can vary based on your situation, how quickly documents are provided, and the details of the property. I will outline the typical steps up front, keep you updated along the way, and work with your real estate team to help keep things moving smoothly. (Typically 30 days)
Is a conventional loan right for me?
The best way to know is to review your goals, timeline, and finances and compare conventional options with other loan types you may qualify for. My job is to provide clear, honest information so you can choose the loan strategy that feels right for you.
Ready to Explore Your Conventional Loan Options?
Whether you’re planning to purchase soon or just starting to explore, I’m here to answer questions, explain your choices, and help you feel prepared for each step.
Connect in the way that works best for you and move forward when you’re ready.
Cole Loans | Mortgage Solutions & Home Loans 