What is a

Conventional Loan?

The most common path to homeownership, offering flexibility and competitive rates for buyers with solid credit.

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The Basics

Conventional Financing

A conventional loan is a mortgage that is not backed by a government agency (like the FHA or VA). Instead, these loans follow guidelines set by Fannie Mae and Freddie Mac. They are the gold standard for many buyers due to their versatility and potential for lower overall costs.

  • Flexible Down Payments: Options as low as 3% for qualified first-time buyers.
  • Property Variety: Can be used for primary residences, second homes, or investment properties.
  • No Upfront Fees: Unlike government loans, there is no upfront mortgage insurance premium.
  • Cancelable PMI: Private Mortgage Insurance can be removed once you reach 20% equity.
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How Do

Conventional Loans Work?

Conventional loans are typically categorized as "conforming" because they adhere to specific loan limits set annually. Because they aren't government-guaranteed, lenders look for a strong financial profile to offer the best terms.

  • Credit Score Matters: Typically requires a minimum score of 620, with the best rates reserved for 740+.
  • Stable Income: Lenders verify consistent employment and a manageable debt-to-income ratio.
  • Appraisal Standards: Requires a professional appraisal to confirm the property’s market value.
  • Term Options: Available in fixed-rate or adjustable-rate (ARM) options, ranging from 10 to 30 years.
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Hear What Our Clients Have to Say

"Outstanding service from start to finish. Champions Mortgage helped us secure a great rate and guided us through loan approval without stress. They were always available when we needed support and made everything feel smooth and straightforward. Would definitely use them again."
Homeowner
"We worked with Champions on both our home purchase and refinance, and each experience was seamless. The team stayed in constant communication and made sure we understood every detail. They truly go above and beyond to help clients feel comfortable and informed throughout the process."
Repeat Customer
"Professional and responsive — exactly what we needed. The Champions Mortgage team was knowledgeable about all our options and helped us choose the best loan for our situation. Communication was excellent, and they made a complicated process feel simple. Highly recommend them for anyone financing a home."
Happy Client
"Champions Mortgage made buying our home an absolute breeze! From start to finish, their team kept us informed, answered all our questions quickly, and guided us through every step of the loan process. We felt supported and confident the whole way — and closed much sooner than expected!"
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Expertise in the Local Market

Pricing your home correctly is a crucial step in today’s competitive real estate market. We stay up-to-date with market trends to adapt to changing conditions and ensure your home is positioned for success. With our experience, local expertise, and extensive data resources, we’ll collaborate with you to develop a pricing strategy that maximizes your home’s value.

We’ll also create a tailored marketing plan to showcase your property, providing expert guidance on staging and the potential benefits of hosting an open house. Together, we’ll ensure your home stands out and attracts the right buyers.

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Types of Conventional Loans

1. Conforming Loans

These loans follow the specific dollar limits and guidelines set by Fannie Mae and Freddie Mac. They are the most popular choice for buyers looking for standard financing on single-family homes or condos.

2. Jumbo Loans

For properties that exceed local conforming loan limits, Jumbo loans provide the necessary financing for high-end or luxury homes. These require higher down payments and excellent credit scores due to the larger loan amounts.

Steps to

Conventional Loan

STEP 1

Evaluate Your Budget

Review your credit score and determine your comfortable down payment amount.

STEP 2

Get Pre-Approved

We analyze your finances to provide a pre-approval letter that strengthens your offer.

STEP 3

Submit Documentation

Gather tax returns, pay stubs, and bank statements for the underwriting team.

STEP 4

Appraisal & Inspection

The lender orders an appraisal to ensure the home’s value supports the loan amount.

STEP 5

Underwriting Review

Our team performs a final audit of all documents to clear any remaining conditions.

STEP 6

Closing Day

Sign your final documents, fund your loan, and receive the keys to your new home.

Expertise in the Local Market

Pricing your home correctly is a crucial step in today’s competitive real estate market. We stay up-to-date with market trends to adapt to changing conditions and ensure your home is positioned for success. With our experience, local expertise, and extensive data resources, we’ll collaborate with you to develop a pricing strategy that maximizes your home’s value.

We’ll also create a tailored marketing plan to showcase your property, providing expert guidance on staging and the potential benefits of hosting an open house. Together, we’ll ensure your home stands out and attracts the right buyers.

Find Your Home’s Value

Pros and Cons of Conventional Loans

Pros:

  • Competitive interest rates for high-credit buyers.
  • PMI can be eliminated once equity reaches 20%.
  • Available for any occupancy type (Primary, Vacation, Investment).
  • Higher loan limits than FHA in many regions.

Cons:

  • Higher credit score requirements than government loans.
  • Stricter debt-to-income (DTI) ratio requirements.
  • Requires a down payment (typically 3% to 5% minimum).

Bottom Line

Conventional loans are the most flexible and widely used mortgage product for a reason. If you have solid credit and a down payment ready, this is likely your best path to long-term savings.

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