Conventional Loans
A conventional home loan is one of the most common ways to finance a home purchase. Unlike loans backed by government agencies such as FHA, VA, or USDA, conventional loans are offered by private lenders and typically follow guidelines established by Fannie Mae and Freddie Mac. With a conventional loan, you borrow money to purchase a home and repay it over a set term, commonly 15 or 30 years, through monthly payments that include principal, interest, property taxes, and homeowners' insurance. Qualified buyers may be able to put down as little as 3%, though putting down 20% or more allows you to avoid private mortgage insurance (PMI); if your down payment is less than 20%, PMI is typically required until you build sufficient equity. Approval is largely based on your credit score, income stability, and overall debt, with most lenders looking for a credit score of 620 or higher. For buyers with solid credit and steady income, conventional loans often offer competitive rates, flexible terms, and the ability to finance primary residences, second homes, or investment properties, making them a versatile and cost-effective option for many homebuyers.