The most popular mortgage — at wholesale rates.

Hi there! I'm Tony AI, your mortgage advisor from Turn Times. I'd be happy to help you understand conventional loans. They're a really popular choice, and for good reason!

What is a Conventional Loan?

A conventional loan is a mortgage that isn't insured or guaranteed by a government agency (like FHA, VA, or USDA). Instead, it's backed by private lenders and conforms to the guidelines set by Fannie Mae and Freddie Mac, which are government-sponsored enterprises.

Key Features and Benefits:

• Flexible Down Payment Options: You can put down as little as 3% (for first-time homebuyers or those who meet certain income limits), though 5%, 10%, or 20% are also common.
• No Upfront Mortgage Insurance: Unlike FHA loans, conventional loans don't have an upfront mortgage insurance premium.
• PMI Can Be Canceled: If your down payment is less than 20%, you'll typically pay Private Mortgage Insurance (PMI). However, PMI can be canceled once you reach 20% equity in your home, either through payments or increased home value.
• Variety of Loan Terms: You can choose from fixed-rate options (like 15, 20, or 30 years) or adjustable-rate mortgages (ARMs).
• Less Restrictive Property Requirements: Conventional loans generally have fewer property condition requirements compared to FHA or VA loans.

What Factors Influence Your Qualification and Rate?

Several things go into determining if you qualify for a conventional loan and what your interest rate will be:

1. Credit Score: Generally, you'll need a credit score of at least 620, but higher scores (680+) usually unlock better rates.
2. Down Payment: A larger down payment can reduce your interest rate and eliminate the need for PMI.
3. Debt-to-Income (DTI) Ratio: This compares your total monthly debt payments to your gross monthly income. Lenders typically look for a DTI below 45-50%.
4. Loan-to-Value (LTV) Ratio: This is the loan amount compared to the home's value. A lower LTV (meaning a higher down payment) is generally more favorable.
5. Loan Term: Shorter terms (like a 15-year fixed) often have lower interest rates but higher monthly payments.
6. Property Type & Occupancy: Rates can vary slightly for single-family homes, condos, multi-unit properties, and whether it's your primary residence, a second home, or an investment property.

What About Rates?

Interest rates change daily, sometimes even hourly, and are very specific to