A conventional mortgage loan is a type of home loan that is not guaranteed or insured by the government. Instead, conventional loans are backed by private lenders and follow guidelines set by Fannie Mae and Freddie Mac. Conventional loans typically require a higher credit score and a larger down payment than government-backed loans.

Is it Easy to Get Approved for a Conventional Loan?

Getting approved for a conventional loan can be more challenging than other types of loans, but it’s not impossible. To qualify for a conventional loan, you’ll need a good credit score, a stable income, and a low debt-to-income ratio. It’s also helpful to have a sizable down payment and a low debt-to-income ratio. If you don’t meet all these requirements, working with a mortgage broker can help you find lenders who offer more flexible loan products.

Is Conventional Better than FHA?

Both conventional and FHA loans have their pros and cons. FHA loans are easier to qualify for, require a lower down payment, and have more lenient credit score requirements. However, they also have higher mortgage insurance premiums and may have more restrictions on the property you can purchase. Conventional loans, on the other hand, have higher credit score requirements, and require a larger down payment, but offer more flexibility in terms of the property you can purchase and have lower overall costs.

What Credit Score is Needed for a Conventional Loan?

To qualify for a conventional loan, you’ll generally need a credit score of at least 620. However, some lenders may require a higher credit score, depending on the loan amount, down payment, and other factors. If you don’t meet the credit score requirements, a mortgage broker like McLaughlin Mortgage can help you find lenders who offer more flexible loan products that are more suitable for your situation.

Do Conventional Loans Require 20% Down?

Conventional loans do not require a 20% down payment, although having one will typically help you secure a lower interest rate and avoid private mortgage insurance (PMI). With a conventional loan, you can put down as little as 3% for a primary residence or 5% for a second home. Keep in mind that a lower down payment may result in higher interest rates and require PMI, which can add to your monthly mortgage payments.

How are Conventional Loans Different than other Loans?

They are not guaranteed or insured by the government, which means that they are riskier for lenders. As a result, conventional loans typically require higher credit scores and down payment requirements. Conventional loans also offer more flexibility in terms of property types and loan amounts, making them a popular choice for homebuyers and investors alike.

Sorting Through All the Options

When deciding on the best financing solution for you, consider factors such as your credit score, down payment amount, and monthly budget. Researching and comparing your options is the best way to find the ideal financing solution for your unique needs.

At McLaughlin Mortgage, our role is to help our clients determine the best mortgage solution for them while ensuring they get the best mortgage rates available. Being a mortgage broker means we’re able to shop rates for our clients from our large network of wholesale lenders and banks with just one application. Our insider access to exclusive pricing, rate offerings, and loan products can’t be found or beat by retail or big-box lenders.

We’re here to make the home loan process a whole lot easier, with tools and expertise that will help guide you along the way, starting with verifying your loan eligibility.

We’ll help you see the differences between loan programs, allowing you to choose the right one for you whether you’re a first-time home buyer or a seasoned investor.

The Loan Process

Here’s what to expect during the loan process:

• Verify your loan eligibility
• Receive options based on your unique criteria and scenario
• Compare mortgage interest rates and terms from our lender network
• Choose the offer that best fits your needs

• Typically lower interest rates than other loan types with higher credit scores
• Does not require mortgage insurance if you put down at least 20%
• Can use to buy primary residences, second homes, and investment properties
• Allows for larger loan amounts compared to government-backed loans
• A variety of fixed-rate and adjustable-rate options are available

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