Question 1

What is a conventional loan?

Accepted Answer

A conventional loan is a mortgage not backed by a government agency (like FHA, VA, or USDA). These loans conform to guidelines set by Fannie Mae and Freddie Mac. They're the most common type of mortgage in the United States.

Question 2

What credit score do I need for a conventional loan?

Accepted Answer

While conventional loans are available with credit scores as low as 620, you'll get the best rates with a score of 740 or higher. Higher credit scores also mean lower PMI rates if putting less than 20% down.

Question 3

How much do I need for a down payment?

Accepted Answer

Conventional loans offer flexible down payment options. First-time buyers can put as little as 3% down. Other buyers typically need 5% minimum. Putting 20% down eliminates the need for private mortgage insurance (PMI).

Question 4

What is PMI and how do I remove it?

Accepted Answer

Private Mortgage Insurance (PMI) protects the lender if you default. It's required when you put less than 20% down. You can request PMI removal once you reach 20% equity, and it's automatically removed at 22% equity.

Question 5

Can I use a conventional loan for an investment property?

Accepted Answer

Yes, conventional loans can be used for investment properties. Requirements are stricter than for primary residences, typically requiring 15-25% down payment and higher credit scores. Rates may also be slightly higher.

Texas Conventional Loans

Conventional Loan Benefits

Loan Options

Frequently Asked Questions

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