MyMortgageRates is an innovative platform by Zeitro for mortgage borrowers and loan specialists. It enables borrowers to quickly find the best loan officers in <city>. Or, a conventional loan officer can get leads from organic searches. Moreover, Zeitro offers various tools like Scenario AI for users to look up conventional loan guidelines in no time and speed up the loan process. For more info, let's dive in.
A conventional loan is a mortgage that isn't backed by a government agency like the FHA or VA. Instead, it follows rules set by Fannie Mae and Freddie Mac, two government-sponsored enterprises. You get these loans from private lenders like banks, credit unions, and online mortgage companies.
They come with fixed or adjustable rates, usually for 15 or 30-year terms. You'll typically need a credit score of at least 620 to qualify, and a higher score will get you a better interest rate. If your down payment is less than 20%, you'll need to pay for Private Mortgage Insurance (PMI). For 2025, the conforming loan limit is $766,550 for most areas and up to $1,149,825 in high-cost regions.
Because there's no government guarantee, lenders take on more risk. This makes conventional loans a better fit for borrowers with strong credit and solid finances who are looking to minimize their overall loan costs.
Pros:
Cons:
Overall, conventional loans are a great option if you have good credit and want to avoid upfront mortgage insurance or lower your long-term costs.
There's a cap on how much you can borrow with a conventional loan and still have it be "conforming." These limits are set by the FHFA. For 2025, the standard limit for a single-unit property is $766,550 in most of the U.S. High-cost areas like parts of California and Hawaii have a limit of $1,149,825.
If you need to borrow more than these limits, you'll be applying for a jumbo loan, which has stricter credit requirements, larger down payment expectations, and often higher rates.
Lenders follow specific guidelines to approve conventional loans. Here's what you generally need:
Qualifying for a conventional loan hinges on a few key financial factors. Lenders generally look for a minimum credit score of 620, though to secure the best available interest rates, you'll want a score of 740 or higher. Your debt-to-income ratio (DTI)—the percentage of your gross monthly income that goes toward debt payments—is another critical factor. While there can be some flexibility, most lenders prefer a DTI under 43%, and it typically should not exceed 50%.
Down payment requirements can start as low as 3% for certain programs, making homeownership accessible even if you haven't saved a large sum. However, if your down payment is less than 20%, you will be required to pay for Private Mortgage Insurance (PMI). A professional appraisal is always mandatory to confirm the property's market value and ensure it serves adequate collateral for the loan. Finally, you'll need to provide thorough documentation, including proof of stable income, employment history, and asset statements, to complete the underwriting process.
Understanding the key differences between Conventional loans, FHA, and VA loans can help you choose the right one for your situation.
A Conventional Loan is not government-insured. It's best suited for borrowers with good credit (typically a 620 score or higher) and offers down payments as low as 3%. Its most significant advantage is that Private Mortgage Insurance (PMI) is only required if your down payment is less than 20% and can be canceled once you reach 20% equity. These loans do have borrowing limits, which for 2025 are set at $766,550 for most areas.
An FHA Loan is backed by the Federal Housing Administration and is a popular choice for those with lower credit scores (as low as 580 with a 3.5% down payment) or higher debt-to-income ratios. The minimum down payment is 3.5%. The main drawback is that its mortgage insurance includes both an upfront fee and an annual premium that typically lasts for the entire life of the loan if you put down less than 10%. FHA loans also have their own, lower loan limits.
A VA Loan is available to eligible veterans, service members, and their spouses. It is backed by the Department of Veterans Affairs and offers tremendous benefits: no down payment is required and there is no monthly mortgage insurance. Instead, borrowers pay a one-time funding fee, which can often be rolled into the loan. While there's no official minimum credit score set by the VA, most lenders will have their own requirements, often around 620. VA loans do not have a set maximum loan amount, but they do have limits on the amount of liability the VA can assume, which effectively caps how much you can borrow without a down payment in certain counties.
Some are, but it's not common. The new buyer must be thoroughly qualified and approved by the lender, who has the final say. This is different from FHA and VA loans, which have clearer assumption policies.
It depends. An FHA loan can be better if you have a lower credit score or a smaller down payment. A conventional loan is often better if you have good credit (e.g., 680+) and can put down at least 3-5%, as you can eventually remove PMI, which saves you money in the long run.
You can put as little as 3% down with programs like the Conventional 97. However, putting down 20% or more helps you avoid PMI entirely and get a better interest rate.
Major issues like structural damage, faulty wiring, roofing problems, or a value that comes in significantly lower than the purchase price can cause the loan to be denied. The appraisal must show the home is sound and worth the loan amount.
PMI typically costs between 0.5% and 1.5% of the loan amount per year. For a $300,000 loan, that's between $125 and $375 per month. Your exact cost is based on your credit score and down payment size.
Focus on the big three: credit (score of 620+), debt (keep your DTI ratio low), and down payment (save at least 3-5%). Having a stable job history and documented income is also essential.
Looking for the best CONVENTIONAL loan officers in Bellingham, MA? Find the top-rated experts who specialize in CONVENTIONAL loans. Get personalized rates and professional advice to secure the best mortgage for your needs.
Connect with our top-rated loan officers in Bellingham, MA to get personalized mortgage rates and expert advice. Our professionals are ready to help you secure the best loan terms for your specific needs.