Conventional Home Loans
Conventional Mortgage Loans Built Around Your Goals
A conventional mortgage rewards good credit and reliable income with flexible terms, competitive rates and mortgage insurance you can eventually drop. The Smith Mortgage Group helps you choose the right term, down payment and rate structure, then guides the loan to closing.
What It Is
What makes a mortgage conventional
A conventional loan is any mortgage that is not insured or guaranteed by a federal agency such as the FHA, VA or USDA. Most follow the underwriting standards set by Fannie Mae and Freddie Mac, which is why they are often called conforming loans when they fall within those agencies' size limits.
Without a government guarantee behind them, conventional home loans lean more heavily on your credit history, income stability and equity. In return, borrowers with strong profiles tend to see lower lifetime costs, more property-type flexibility and private mortgage insurance that can be removed once enough equity builds up.
Through The Smith Mortgage Group, a division of First Community Mortgage, Inc., you can compare 30-year and 15-year fixed terms alongside adjustable-rate options. If the amount you need goes above conforming limits, the conversation shifts to our jumbo mortgage options.
Who It Fits
A conventional loan may suit you if you
Every file is reviewed individually, but these traits often point toward conventional financing.
- Have a credit history in good standing and want pricing that rewards it
- Can put down at least 3%–5% as a qualified buyer, or prefer to put 20% down and avoid PMI entirely
- Want mortgage insurance that goes away instead of lasting for the life of the loan
- Are buying a second home or a rental property rather than only a primary residence
- Earn stable, documented income from wages, salary or a well-established business
- Plan to keep the home long enough for equity growth to cut your costs
Still building credit or working with a smaller down payment? Our FHA loan overview explains a more flexible alternative.
Key Benefits
Why buyers choose conventional financing
Removable PMI
With less than 20% down, PMI applies, but it can generally be canceled later as your loan balance falls and equity grows.
Term and rate choices
Pick a 30-year fixed for a lower payment, a 15-year fixed to build equity faster, or an ARM if you expect to move or refinance.
Broad property use
Conventional loans can finance a primary residence, a vacation home or an investment property, subject to program guidelines.
Fast, verified pre-approval
Pre-approval decisions can come in as little as 24 hours, so your offer carries the weight of verified financing.
Requirements
Conventional qualifying basics
These are general guidelines. Final eligibility depends on qualification, underwriting and the specific program.
| Factor | What lenders typically look for |
|---|---|
| Credit | An established history; stronger scores generally earn better pricing and lower PMI |
| Down payment | As low as 3%–5% for qualified buyers; 20% avoids PMI |
| Debt-to-income | Monthly debts that leave room for the new housing payment |
| Income | Stable, verifiable earnings, typically supported by recent pay stubs, W-2s or tax returns |
| Reserves | Savings after closing may be required, especially for second homes and rentals |
| Property | An appraisal supporting the purchase price and meeting program standards |
Not sure what price range those guidelines support? The affordability calculator gives you a starting point.
Compare
Conventional vs FHA at a glance
Both programs serve plenty of first-time buyers. The better fit depends mostly on your credit and how much you can put down.
| Feature | Conventional | FHA |
|---|---|---|
| Minimum down | As low as 3%–5% for qualified buyers | 3.5% with qualifying credit |
| Mortgage insurance | PMI under 20% down; can be removed later | Upfront and annual MIP; often stays unless you refinance |
| Credit flexibility | Rewards stronger credit profiles | More forgiving of past credit issues |
| Second homes and rentals | Allowed under program guidelines | Primary residences only |
Plug your own numbers into our conventional vs FHA comparison tool to see how the monthly payment and long-term cost differ.
Steps
How a conventional loan comes together
Start your pre-approval
Share your income, assets and goals with no hard credit pull to begin. We verify the details and issue a pre-approval you can shop with.
Choose term and structure
Weigh a 30-year against a 15-year, fixed against adjustable, and decide how much to put down versus keep in reserve.
Appraisal and underwriting
Once you have an accepted offer, we order the appraisal, submit to underwriting and keep you informed as each condition clears.
Sign and move in
Most loans close in 30–45 days, and qualified files can reach a 21-day closing when documents and appraisal move smoothly.
FAQ
Conventional mortgage questions, answered
How much do I need to put down on a conventional loan?
Qualified buyers may put down as little as 3%–5%, depending on the program and whether they are first-time buyers. Putting down 20% lets you skip PMI altogether. We can show the payment difference between several down payment amounts so you can decide what makes sense.
When can I stop paying PMI?
Conventional PMI can generally be removed once you reach enough equity, either through paying down the balance or, in some cases, through appreciation confirmed by an appraisal. Specific timing depends on the loan servicer and program rules.
Is a 15-year or 30-year conventional loan smarter?
A 15-year term usually carries a higher monthly payment but builds equity faster and costs less interest overall. A 30-year keeps the payment lower and frees up cash flow. Try both in our mortgage payment calculator before choosing.
Can I buy a vacation home or rental with a conventional loan?
Yes. Conventional financing is available for second homes and investment properties, though those typically require a larger down payment and more reserves. Dedicated rental strategies are covered on our investment property financing page.
What happens if my loan amount exceeds conforming limits?
Loans above the conforming limit for your county are considered jumbo and follow different underwriting standards. We will confirm the limit for your area and price both options if you are near the line.
Can a self-employed borrower get a conventional loan?
Often, yes, provided the income can be documented, usually with tax returns. If write-offs reduce qualifying income too much, alternative-documentation programs may be a better route.
Keep Exploring
Related resources
Let's Talk
Questions about conventional mortgage loans?
Send a quick note and Sterling Smith will reply within two business hours (Mon–Fri, 9am–5pm CT). Prefer to talk now? Call or text 931-205-9873.
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