The most popular loan type in America. Conventional loans offer competitive rates, flexible terms, and the ability to cancel PMI—making them ideal for borrowers with solid credit and stable income.
Most lenders require 620+, but you'll get significantly better rates and terms with 680+ credit. Scores of 740+ typically unlock the best available pricing. Each 20-point increase can meaningfully reduce your rate.
Yes! Fannie Mae's HomeReady and Freddie Mac's Home Possible programs allow 3% down for qualifying borrowers. These programs have income limits (typically 80% of area median income) and may require homebuyer education, but offer competitive rates and reduced PMI.
PMI automatically cancels when your loan balance reaches 78% of the original home value. You can request removal at 80% LTV if you have a good payment history. Alternatively, if your home has appreciated, you can request a new appraisal to prove you've reached 80% LTV sooner.
Conforming loans meet Fannie Mae and Freddie Mac guidelines, including loan limits ($766,550 in most areas for 2024). Non-conforming loans exceed these limits (jumbo loans) or don't meet other guidelines. Conforming loans typically offer better rates and easier qualification.
Yes, conventional loans allow gift funds from family members, domestic partners, or fiancé(e)s. You'll need a gift letter stating the funds don't need to be repaid, plus documentation of the transfer. Some programs may require a minimum borrower contribution.
Seller contributions (concessions) are limited based on your down payment: 3% maximum for down payments under 10%, 6% for 10-24% down, and 9% for 25%+ down. Investment properties are limited to 2% regardless of down payment.
The standard maximum DTI is 45%, but automated underwriting may approve up to 50% with strong compensating factors like high credit scores, significant reserves, or low LTV. Manual underwriting typically caps at 36-43% DTI.
Yes! Conventional loans allow investment properties with 15% down for single-family homes and 25% down for 2-4 unit properties. Expect higher interest rates (typically 0.5-0.75% more than primary residence) and stricter reserve requirements.
After Chapter 7 bankruptcy: 4 years. After Chapter 13 bankruptcy: 2 years from discharge or 4 years from dismissal. After foreclosure: 7 years. After short sale: 4 years. Some exceptions exist for extenuating circumstances.
15-year loans offer lower interest rates (typically 0.5-0.75% less) and build equity faster, but have higher monthly payments. 30-year loans have lower payments and more flexibility. Consider your budget, goals, and whether you'll stay in the home long-term.
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Information provided is for educational purposes only and is not a commitment to lend. All loans subject to underwriting approval. Rates and terms subject to change. Equal Housing Lender. Equal Housing Opportunity.