Credit Profile
Credit history, scores and recent obligations help determine eligibility, pricing and mortgage-insurance options.
Flexible financing for qualified borrowers
Conventional Home Loans
A conventional mortgage is not insured or guaranteed by a federal government program. It may offer flexible choices for a primary residence, second home or investment property when the borrower, property and complete loan structure meet the applicable guidelines.
29 years of mortgage experiencePurchase and refinance optionsComplete loan comparisons
The short answer
What Is a Conventional Loan?
A conventional loan is a mortgage that is not insured or guaranteed by the FHA, VA or USDA. Conforming conventional loans follow standards associated with Fannie Mae or Freddie Mac, while non-conforming loans use different program guidelines.
Conventional financing can support both purchases and refinances. The right structure depends on the loan amount, occupancy, credit profile, verified income and assets, property type and the result you want the loan to accomplish.
Conventional is a category—not a guarantee of the lowest cost.Compare the rate, annual percentage rate, mortgage insurance, closing costs, cash required and expected time keeping the loan.
Start with the complete profile
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What Shapes a Conventional Loan Option?
Program availability and pricing are based on connected parts of the application. A change in one area can affect the others.
Income and Employment
Income must be documented and evaluated under the rules applying to the selected program and borrower profile.
Funds and Reserves
Down payment, closing funds, permitted sources and any required reserves are reviewed together.
Property and Occupancy
Primary residences, second homes and investment properties can carry different requirements and pricing.
Loan Amount and Equity
The requested amount, current conforming limits and loan-to-value position help define the available path.
Monthly Obligations
The proposed housing expense and other recurring debts are considered with verified qualifying income.
Choose the payment structure
Fixed Rate and Adjustable Rate Serve Different Plans
The interest-rate structure should fit both the monthly-payment goal and the expected time in the property or loan.
Predictable rate structure
Fixed-Rate Mortgage
- The interest rate remains fixed for the loan term
- Principal and interest payments are predictable
- Property taxes and insurance may still change
- Different repayment terms can change payment and total interest
- Useful when long-term payment stability is the priority
Rate may change later
Adjustable-Rate Mortgage
- An initial rate applies for a defined period
- The rate may adjust later using the loan's index and margin
- Payment can rise or fall after an adjustment
- Caps limit certain rate changes but do not prevent them
- Review the highest possible payment and expected timeline carefully
Compare the full cost
Do Not Judge the Loan by the Rate Alone
- Interest rate and annual percentage rate
- Principal, interest, taxes and insurance
- Mortgage insurance, when applicable
- Discount points and lender credits
- Closing costs and prepaid expenses
- Cash needed to close
- Loan term and total projected interest
- Expected time keeping the property and loan
Understand the equity position
Mortgage Insurance May Be Part of the Payment
Lower down payment or equity
may require private mortgage insurance
may require private mortgage insurance
PMI protects the lender, not the borrower. Its cost and cancellation rules depend on the loan and applicable requirements.
Review the tradeoff
A 20% Down Payment Is Not Always Required
Some conventional programs may permit a smaller down payment for eligible borrowers. When the loan-to-value is higher, private mortgage insurance may be required and becomes part of the complete monthly-cost comparison.
- Compare the benefit of buying sooner with the cost of mortgage insurance.
- Ask how the down payment changes pricing, reserves and cash needed to close.
- Review the applicable PMI cancellation or termination rules.
- Preserve appropriate savings for ownership costs and unexpected expenses.
- Use the Loan Estimate to compare proposed structures consistently.
Match the property and purpose
Where Conventional Financing May Fit
The available terms differ by occupancy, property type, loan amount and complete application.
Primary Residence
Finance a home you intend to occupy as your principal residence, subject to property and program guidelines.
Second Home
Options may be available for an eligible second home when occupancy and financial requirements are met.
Investment Property
Conventional financing may support eligible rental properties with additional down-payment, reserve and pricing considerations.
Refinance
Change the rate, term or loan structure—or access equity—after comparing costs, payment and expected timeline.
The conventional loan process
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From Complete Review to Closing
The exact process varies, but a well-prepared conventional loan generally follows these connected stages.
Define the Goal
Identify the purchase or refinance objective, property use, budget and expected timeline.
Review the Complete File
Evaluate credit, income, assets, obligations and the documentation available to support them.
Compare Structures
Review loan amount, rate type, term, mortgage insurance, costs and estimated payment.
Process and Close
Complete appraisal and underwriting requirements, review disclosures and prepare for closing.
Continue your research
Related Mortgage Guides
FHA Loans
Compare a government-insured option with different down-payment, credit and mortgage-insurance considerations.
Explore FHA LoansJumbo and High-Balance Loans
Review financing paths for loan amounts above standard conforming limits or in designated high-cost areas.
Explore Larger Loan OptionsMortgage Pre-Approval
Understand how a documented review can clarify the financing range before you shop for a home.
Review Pre-ApprovalCompare the complete loan
Ready to Review Your Conventional Loan Options?
Start with a conversation about your goal, property, income, available funds and expected timeline.