A conventional loan is a type of mortgage loan that is not insured or guaranteed by a government entity, such as the Federal Housing Administration (FHA) or the U.S. Department of Veterans Affairs (VA). Instead, conventional loans are backed by private lenders, such as banks or mortgage companies.
Conventional loans typically have stricter qualification criteria compared to government-backed loans. Lenders usually require a higher credit score, a lower debt-to-income ratio, and a larger down payment for a conventional loan. However, conventional loans offer more flexibility in terms of loan amounts and property types, as they are not limited by specific government guidelines.
Conventional loans can be used to purchase a primary residence, a second home, or an investment property. They come in various terms, such as fixed-rate mortgages or adjustable-rate mortgages (ARMs), allowing borrowers to choose the option that best suits their financial situation and goals.
It's important to note that each lender may have its own specific requirements and terms for conventional loans, so it's always a good idea to reach out to one of our experienced Mortgage Loan Officers.