The Gold Standard of Home Financing: Is a Conventional Loan Right for You?

Modern home keys on a table with a happy couple in a sunlit living room, representing a successful conventional loan approval.

Expert Guidance for Your Home Journey.

See If I Qualify

When you start your home-buying journey, the sheer number of mortgage options can feel overwhelming. However, one choice remains the most popular for a reason: the Conventional Loan.

Unlike government-backed options (like FHA or VA loans), conventional loans are provided by private lenders. Because they aren’t insured by the government, they often offer more flexibility and lower long-term costs for those who qualify.

Why Choose a Conventional Loan?

For many borrowers, the benefits of “going conventional” are hard to beat:

  • Property Flexibility: Whether you’re buying a cozy condo, a vacation getaway, or an investment property to build your portfolio, conventional loans can do it all.
  • Cancellable Mortgage Insurance: If you put down less than 20%, you’ll typically pay Private Mortgage Insurance (PMI). The best part? Once you reach 20% equity in your home, you can usually request to have that payment removed—saving you hundreds every month.
  • Higher Loan Limits: If you have your eye on a higher-priced home, conventional loans often offer more “room to run” than FHA alternatives.
  • Lower Total Costs: For borrowers with strong credit, conventional loans typically offer the most competitive interest rates and lower overall fees.

What Are the Requirements in 2026?

While every borrower’s situation is unique, here is the baseline for what lenders are looking for this year:

  • Credit Score: Generally, a minimum score of 620 is required. Higher scores (740+) will unlock the very best interest rates.
  • Down Payment: Contrary to the “20% myth,” you can often secure a conventional loan with as little as 3% down if you are a first-time homebuyer.
  • Debt-to-Income (DTI) Ratio: Lenders prefer to see that your total monthly debts take up no more than 43% to 45% of your gross monthly income.

Conventional loans are a powerful tool for building wealth through real estate. If you have stable income and a solid credit history, this path often leads to the lowest cost of homeownership over time.