Conventional loans

The default program, and usually the cheapest one over time.

Conventional loans are not backed by a government agency. That makes them slightly stricter to qualify for and, for most borrowers with decent credit, cheaper to hold.

See if I qualifyTalk to Cole
From 3%Down payment on some programs
620+Typical minimum credit score
MI endsDrops off at 20% equity

Conventional loans

Why it usually wins

The single biggest advantage over FHA is mortgage insurance. On a conventional loan, once you reach 20% equity the monthly premium comes off. On FHA it stays for the life of the loan unless you refinance out of it. Over a full term that difference is enormous.

The trade is that conventional underwriting is less forgiving. Credit events, thin files and higher debt ratios are handled more mechanically, which is exactly why FHA exists.

  • Credit around 680 and up, where pricing gets good
  • A down payment of 3% or more, gifts allowed
  • Buyers who plan to hold long enough to reach 20% equity
  • Second homes and investment properties, which FHA does not do

What is assessed

What a lender is actually looking at.

None of this is a secret, and knowing it early is the difference between a smooth file and a scramble two weeks before closing.

Credit score620 is the usual floor, but pricing improves meaningfully at 680 and again at 740. Between those bands the same loan can cost noticeably different amounts.
Down payment3% exists on specific first time buyer programs, 5% is more common, and 20% removes mortgage insurance from day one.
Debt to incomeUsually up to about 45%, sometimes 50% with strong compensating factors such as reserves or a large down payment.
Loan limitAbove the conforming limit it becomes a jumbo loan, which is a different underwriting conversation entirely.

Three minutes

Find out where you stand on this program.

The qualifier asks five questions and comes back with the programs you fit and an estimated monthly payment. It does not run a credit check to do it.

  • No credit check to get an answer
  • An estimated payment before anyone calls you
  • Routed to a named loan officer, not a queue

See what you qualify for

Free

Questions

The ones people actually ask.

When does mortgage insurance actually come off?
It cancels automatically at 78% of the original value, and you can request removal at 80%. If your home has appreciated, an appraisal can get you there sooner than the amortisation schedule would.
Is 20% down actually necessary?
No, and waiting for it is often the more expensive choice in a rising market. The right comparison is what mortgage insurance costs against what the house is likely to do while you save.
Can the down payment be a gift?
Yes, from a family member, with a gift letter and a clear paper trail showing where the money came from and that it is not a loan.

Who handles conventional loans

Cole Wall

Loan Officer · NMLS #2808449

Cole thinks an informed buyer is a confident buyer, so he will not let you sign anything you cannot explain back to him.

Read the full profile (714) 469-9577

Other programs

Compare it against the alternatives.

Most borrowers fit more than one program. Which one is best depends on how long you will hold the loan, not only on what you qualify for today.

Buying a homePurchase loans RefinancingLower it or shorten it ConventionalFrom 3% down FHA3.5% down, 580+ VANo down payment USDAZero down, eligible areas JumboAbove the limit Bank statementSelf employed InvestorDSCR and short sales CommercialFive units and up

Get a straight answer before you commit to anything.

Three minutes, no credit check, no obligation, and a named loan officer on the other end of it.

See what I qualify for Or call (714) 469-9577

August Mortgage Group, NMLS #2642110. Equal Housing Lender. This is not a commitment to lend. All loans subject to credit approval and property appraisal.