Conventional mortgage programs are most common and offered by nearly any mortgage company, broker or bank. This type of mortgage is not insured by federal government, which makes applying process much faster.
- Down payment. Generally, required down payment for conventional loan starts at 3% depending on your credit score, income and financial assets.
- In order to qualify for conventional mortgage loan, your monthly mortgages and other non-mortgage debt should not exceed 45%
- Credit Score. Your credit score plays a major role in your qualification for conventional mortgage loan. Most lenders set a minimum FICO score at 620. However, if you plan on making a down payment under 20%, the minimum required FICO score for you will raise accordingly.
Keeping in mind above mentioned eligibility criteria, there are a few advantages to conventional loans. For instance, the loan processing is often shorter and less complicated, since it does not depend on governmental approval. Mortgage insurance is not required on loans with higher down payment, however, even when MI is required the premiums are much lower in comparison with government-insured loans.