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Flexible Ways to Finance a Home
Conventional financing can support primary residences, second homes, and investment properties. Down payment, reserve, and pricing requirements vary with occupancy, property type, and the loan program.
Home Purchase
Conventional Loans
Your down payment is only one part of a good mortgage plan. Whether you are buying your first home or your next one, we help you compare payments, mortgage insurance, and cash needed so you can choose financing that fits your goals.
Conventional financing for qualified buyers in Texas, Florida, Minnesota, and Colorado.
Start With the Basics
How a Conventional Loan Works
A conventional mortgage offers choices in property use, down payment, and repayment term. The best structure depends on your finances and the home you want to buy.
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A Payment Built Around Your Choices
Your loan amount, repayment term, interest rate, and mortgage insurance affect the payment. Include property taxes, homeowners insurance, and any association dues when comparing your total housing budget.
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Conforming Is One Type of Conventional Loan
Conventional loans are not insured or guaranteed by a government agency. Conforming loans meet applicable Fannie Mae or Freddie Mac requirements, including loan limits. Amounts above the applicable conforming limit may require jumbo financing.
Explore jumbo financing →Understand Your Starting Point
What Lenders Review and What to Prepare
Qualification is a review of the full application. Gather what you have, and we will help identify the records and loan options that fit your situation.
What Lenders Review
- Credit history
- Your credit profile and the applicable underwriting and lender requirements matter. One published score threshold does not describe every conventional loan.
- Documented income
- The review considers income stability and likelihood of continuance. Changing jobs does not automatically mean starting a new two year waiting period.
- Monthly obligations
- The lender compares qualifying income with housing expenses and other debts. The allowable debt ratio depends on the application and program.
- Available funds
- Document the down payment, closing costs, and reserves when required. Keep some room in your plan for expenses after the move.
- The property
- A valuation and property eligibility review are needed. Some eligible applications receive an appraisal waiver; others require an appraisal or additional property information.
Your Document Starting List
- Income and employment records
- Recent pay statements and W2s, or records supporting retirement, self employment, or other income being used to qualify.
- Account statements
- Recent statements for funds used toward the purchase, plus supporting documentation for gifts or transfers when applicable.
- Existing housing and debts
- Information about current mortgages, other properties, and obligations that affect the new loan.
- Contract and property details
- The signed purchase agreement once you choose a home, along with insurance and property information as requested.
This is a general checklist. Your income sources, property, and underwriting findings determine the final documentation needed.
Balance the Payment and Your Savings
How Much Should You Put Down?
The right down payment should leave you comfortable with both the monthly cost and the cash you retain after closing. A down payment is separate from closing costs and prepaid expenses.
A Smaller Down Payment
As low as 3% for eligible purchases
May let you buy while keeping more savings available. Eligibility depends on the program and property. A larger loan balance and mortgage insurance can increase the payment.
A Middle Ground
Compare options such as 5% or 10%
Putting more down reduces the amount borrowed while preserving some cash. Compare the actual payment and insurance cost instead of assuming one percentage is automatically best.
20% Down or More
Generally avoids PMI on a standard first mortgage
Can reduce borrowing and avoid private mortgage insurance. Weigh those benefits against the savings you would have left for repairs, reserves, and other priorities.
These are comparison scenarios, not a statement that every program or property qualifies at these percentages. Second homes, investment properties, and other loan types may require different amounts.
Estimate your mortgage payment as you compare down payment amounts.
Make the Loan Fit Your Purchase
Questions Worth Reviewing Before You Choose
Your property, income, and timing can change which financing approach makes sense.
Conventional, FHA, or VA?
Compare complete offers using the same purchase assumptions: payment, fees, mortgage insurance, down payment, and cash retained. VA is an option for eligible borrowers; FHA may offer a different fit for some credit profiles.
Buying a Condo?
The review can involve both your application and the condo project. Association finances, insurance, and other project details may affect eligibility. Identify the property type early so these questions are addressed before closing.
Working for Yourself?
Business owners and independent contractors can qualify for standard conventional financing. Review qualifying income and the right records before assuming you need an alternative loan.
Buying Before You Sell?
Your current payment, funds tied up in the existing home, and expected sale proceeds can affect the new purchase. Review timing and qualification before relying on equity that has not yet been received.
Common Questions
Conventional Loan Questions
Answers to help you plan your purchase.
Do I need 20% down for a conventional loan?
No. Eligible purchases may qualify with a smaller down payment, including some programs with as little as 3% down. The minimum depends on the program, occupancy, and property. Compare cash needed and the total payment, including mortgage insurance when applicable.
Can a repeat buyer qualify with 3% down?
Potentially. Some conventional programs allow eligible repeat buyers to put 3% down, while others require a first time buyer. Income limits, property rules, and other conditions may apply. We can review which options are available for your purchase.
What credit profile do lenders review?
Lenders consider your credit history alongside income, debts, funds, and the property. Score requirements vary by program, underwriting method, and lender. A stronger credit profile can affect pricing, but a single score does not determine the entire application.
When can private mortgage insurance be removed?
Cancellation depends on the mortgage insurance arrangement, payment history, loan balance, and applicable rules. For many covered loans, you can request cancellation at 80% of the original value, subject to conditions. Scheduled automatic termination generally occurs at 78% when payments are current. Increased value follows separate investor or servicer requirements.
Can I get a conventional loan if I am self employed?
Yes, when your documented qualifying income and overall application meet the requirements. Owning a business does not automatically mean you need a bank statement or other Non QM loan.
Review documents for self employed borrowers →How should I compare conventional with FHA or VA?
Compare the rate, fees, total payment, mortgage insurance or funding fee, and cash needed using the same purchase assumptions. Your eligibility and how long you expect to keep the loan also matter.
Use the VA versus conventional comparison →When might I need a jumbo loan?
If your requested loan amount exceeds the conforming limit applicable to the property and location, jumbo financing may be needed. Conforming limits are updated annually. Jumbo programs have their own income, credit, down payment, and reserve requirements.
Explore jumbo mortgage options →Keep Exploring
Helpful Mortgage Resources
Your Next Home Deserves
a Clear Financing Plan.
Understand your options before committing your savings. Get guidance on your down payment, monthly payment, and next steps.