What is a Conventional Mortgage or Loan?
Conventional mortgages loans, or conventional mortgages, are not guaranteed or insured by the United States Federal Government. These loans are typically “conforming,” which means that they are eligible to be sold to Fannie Mae or Freddie Mac, both of which are government-sponsored businesses that purchase mortgages from lenders like us, then sell them to investors or other third parties. However, some conventional loans can be non-conforming, meaning they don’t meet Fannie Mae or Freddie Mac’s requirements.
Every conventional loan requires different approval criteria, which is also true of applicants themselves. All lenders have guidelines for their borrowers, so reach out today to see if you’re qualified for a conventional mortgage. It’s important to keep in mind that conventional loans tend to have stricter eligibility requirements compared to loans insured by the government (FHA, USDA, VA, etc.), so expect to need a credit score of at least 620 and a DTI ratio of 50% or less in most cases.