If you have decent credit and some savings set aside, a conventional loan is probably the first mortgage option you should look at. It’s the most common type of home loan in the country, and for good reason: it’s flexible, the rates are competitive, and you can put down as little as 3% if you qualify.
A conventional loan is any mortgage that isn’t backed by a government agency like the FHA, VA, or USDA. Instead, it follows guidelines set by Fannie Mae and Freddie Mac, the two entities that purchase most mortgages from lenders across the country. Because these loans meet a standardized set of rules, lenders can offer them at competitive rates with fewer restrictions than government-backed programs typically carry.
Conventional loans work well for buyers who have their finances in reasonably good order. You don’t need perfect credit, but the stronger your profile, the better your rate and terms will be.
You’re likely a good fit if:
You can put down at least 3% (5% or more gets you better pricing)
Your debt-to-income ratio is manageable, generally under 45%
You have steady, documentable income
This is the part that surprises most first-time buyers: you do not need 20% down for a conventional loan. That number gets repeated so often it’s practically folklore, but the real minimum is 3% for qualified first-time buyers and 5% for repeat buyers in most cases.
Putting down less than 20% means you’ll pay private mortgage insurance, or PMI, until you build enough equity to remove it. PMI isn’t a life sentence. Once your loan balance drops to 80% of your home’s value, you can request that it be dropped. On many loans, it’s removed automatically at 78%.
Most conventional loans are structured as 30-year or 15-year fixed-rate mortgages, meaning your interest rate never changes for the life of the loan. That predictability is a big reason conventional loans remain the default choice for owner-occupied homes.
A 15-year term builds equity faster and saves a substantial amount in interest, but the monthly payment is higher. A 30-year term keeps payments lower and more manageable, which matters if you’re also budgeting for moving costs, furnishing a home, or building a reserve fund. The right call depends on your monthly budget and how long you plan to stay in the home, and it’s worth running both scenarios side by side before you decide.
Conventional loans give you more room to maneuver than FHA, VA, or USDA loans in a few specific ways:
That track record comes from an advisor-first approach: rather than just processing paperwork, Chris looks at how a conventional loan fits into your broader financial picture, not just your closing date. If you’re weighing a 15-year term against a 30-year one, or trying to figure out how much down payment actually makes sense for you, that’s the conversation he has with clients every day.
