A versatile starting point.
A conventional loan is a home loan that is not insured by a government agency. Most follow guidelines set by Fannie Mae and Freddie Mac.
Who it is for
- Buyers with established credit
- Buyers who want to avoid or eventually remove mortgage insurance
- People buying a second home or an investment property
- Homeowners refinancing out of a loan with permanent mortgage insurance
What you will need
- Photo ID for each borrower
- Recent pay stubs and the last two years of W-2s, or tax returns if you are self-employed
- Recent statements for the accounts holding your down payment and reserves
- Permission to check your credit
Good to know
- If your down payment is below a certain share of the price, the loan will have private mortgage insurance. Unlike some other loans, it can come off later once you have built enough equity.
- Pricing depends more heavily on your credit score and down payment than it does with government-backed loans.
- Conventional loans can be used for main homes, second homes and rentals.
Common questions
Will I have to pay mortgage insurance?
Only if your down payment is below a set share of the home price. When it applies, it can be removed later under rules based on your equity.
Is a conventional loan harder to qualify for?
It generally asks for stronger credit than a government-backed loan. For many borrowers with good credit it ends up costing less over time.
Can I use a conventional loan for a rental property?
Yes. Conventional loans are available for investment properties and second homes, with different requirements than for a main home.