Loans
Conventional Loan
A mortgage that is not insured or guaranteed by a government agency like FHA, VA, or USDA. Conventional loans can be conforming or jumbo and typically require a credit score of 620 or higher. If you put less than 20% down on a conventional loan, you will pay private mortgage insurance (PMI), which can be removed once you build enough equity.
Why It Matters
Understanding Conventional Loan is a key part of choosing the right mortgage. The type of loan you select affects your monthly payment, how much interest you pay over the life of the loan, and how much flexibility you have if your financial situation changes.
When comparing loan options, pay attention to how conventional loan fits into the bigger picture of your borrowing costs. A knowledgeable loan officer or mortgage broker can help you evaluate whether this option aligns with your financial goals and timeline.