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Conventional Loan     

 

Conventional Loans: The Gold Standard for Home Financing

Stable. Reliable. Proven.

A Conventional Loan is the most popular choice for homebuyers and for a good reason. Because these loans are not directly insured by the federal government, they often offer the most competitive rates and flexible terms for borrowers with stable income and good credit.

Whether you are buying your first home, upgrading to your "forever home," or investing in a rental property, a Conventional mortgage at LoanHouse provides the long-term security you need.

Why Choose a Conventional Loan?

If you have a strong credit profile and a down payment of at least 3%, a Conventional loan often outperforms FHA or USDA options in the long run.

  • Lower Long-Term Costs: Once you reach 20% equity, you can cancel your Private Mortgage Insurance (PMI), significantly lowering your monthly payment.

  • Higher Loan Limits: Conventional loans allow for higher purchase prices than FHA loans in most counties.

  • Property Versatility: Use Conventional financing for primary residences, second homes, or investment properties.

  • Flexible Terms: Choose between 10, 15, 20, or 30-year fixed rates, or Adjustable Rate Mortgages (ARMs).

  • Stronger Offers: Sellers often prefer Conventional pre-approvals because they typically have fewer property-inspection hurdles.

Program Comparison & Requirements

Feature Conventional Loan Details
Minimum Down Payment 3% for First-Time Buyers / 5% for Repeat Buyers
Minimum Credit Score 620
Private Mortgage Insurance Required only if down payment is less than 20%
Property Types 1-4 Units, Condos, PUDs, Modular Homes
Loan Purpose Purchase, Rate-Term Refinance, or Cash-Out Refinance
Loan Limits Up to Conforming Limits ($766,550+ depending on area)

Conventional vs. Government Loans (FHA/VA/USDA)

Why do many LoanHouse clients choose Conventional?

  1. PMI Removal: Unlike FHA loans (where mortgage insurance often stays for the life of the loan), Conventional PMI automatically drops off once you own 22% of your home.

  2. Appraisal Lenience: Conventional appraisals are generally less strict regarding minor cosmetic repairs compared to government-backed loans.

  3. No Upfront Fees: Unlike FHA, VA, or USDA, there is no "Upfront Mortgage Insurance" or "Funding Fee" required at closing.

Frequently Asked Questions

Do I really need a 20% down payment?

No! This is one of the biggest myths in real estate. While 20% down allows you to avoid PMI, you can secure a Conventional loan with as little as 3% down if you are a first-time buyer, or 5% down for repeat buyers.

What is the "Conforming Loan Limit"?

This is the maximum amount a Conventional loan can be for it to be "conforming" to Fannie Mae and Freddie Mac standards. For 2026, the limit in most areas is $766,550. If you need to borrow more, check out our [Jumbo Loan Page].

Can I use a Conventional loan for a rental property?

Absolutely. Conventional loans are the primary vehicle for "buy and hold" investors. Note that investment properties usually require a higher down payment (typically 15–25%) compared to a primary residence.

How does my credit score affect my rate?

With Conventional loans, your credit score has a direct impact on your interest rate and your PMI cost. The higher your score, the lower your monthly payment will be.

Secure Your Future with a LoanHouse Pre-Approval.

Don't head into the housing market without the strongest financing in your pocket. Get a Conventional pre-approval from LoanHouse today and show sellers you mean business.