– Typically requires a down payment ranging from 3% to 20% of the home’s purchase price.

– If the down payment is less than 20%, borrowers may need to pay for Private Mortgage Insurance (PMI).

– Conventional loans generally require a higher credit score than government-backed loans.

– A credit score of at least 620 is often required, but higher scores (e.g., 740 and above) can qualify for better interest rates.

– Conforming conventional loans must meet the loan limits set by the Federal Housing Finance Agency (FHFA). In 2024, the conforming loan limit for most areas in the U.S. is $776,600 for a single-family home.

– Loans that exceed these limits are known as “jumbo loans” and have different requirements.

– Required if the down payment is less than 20%.

– PMI protects the lender in case the borrower defaults on the loan and can be removed once the borrower has 20% equity in the home.

– Conventional loans typically offer competitive interest rates.

– Interest rates can be fixed (staying the same for the entire loan term) or adjustable (changing after an initial fixed period).

– Common loan terms include 15, 20, or 30 years.

– The length of the loan term affects the monthly payment and the total interest paid over the life of the loan.

– Conventional loans can be used to finance a wide range of property types, including primary residences, second homes, and investment properties.

– Properties financed with conventional loans must meet certain standards, but these are typically less stringent than those required for government-backed loans.