Explore the right conventional loan options for you and get pre-qualified in just 3 minutes with no credit impact.
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Calculate Your Conventional Loan Payment Now!
Thinking about buying a home in the USA? Use our conventional loan mortgage calculator to estimate your monthly payment, compare options, and explore solutions tailored to your goals.
Enter your loan amount, interest rate, and down payment to see your estimated payment, including taxes, insurance, PMI, and HOA fees.
requested loan amount
$750,000
with an interest of
3.38%
with a down payment of
$75,000
with a loan tenure of
25 years
What is a Conventional Loan?
Conventional loans are the most popular home financing option in the USA, offering flexibility, competitive rates, and a wide range of term options. Unlike government-backed loans (FHA, VA, USDA), conventional loans are provided by private lenders and generally require a higher credit score, making them ideal for borrowers with established credit.
Ideal For:
- Homebuyers with good to excellent credit
- Those with at least 5-20% down payment
- Buyers looking for flexible loan terms
Unlock Your Homeownership Dream with a Conventional Loan
Conventional loans are ideal for homebuyers with good credit and stable income. Not backed by a government agency, they offer flexible terms and competitive rates. With 20% down, you can avoid PMI making it a smart choice with Pegasus Mortgage.
Benefits of a Conventional Loan
Competitive Interest Rates
Generally, borrowers with strong credit scores can secure lower interest rates with conventional loans.
Flexible Terms
Choose from various fixed-rate and adjustable-rate options, allowing you to tailor your mortgage to your financial goals.
No Upfront Mortgage Insurance Premiums
Unlike FHA loans, conventional loans don’t require an upfront mortgage insurance premium.
Eliminate PMI with 20% Down
If you make a down payment of 20% or more, you can avoid paying Private Mortgage Insurance (PMI), saving you money on your monthly payments.
Fewer Restrictions on Property Type
Conventional loans often have more lenient property requirements compared to government-backed loans.
Streamlined Refinancing Options
Easier access to refinancing options to potentially lower your rate or change your loan term.
Is a Conventional Loan Right for You?
Conventional loans are generally best suited for:
- Borrowers with Good to Excellent Credit: A higher credit score (typically 620+) will help you qualify for the best rates and terms.
- Those with a Down Payment of 3% or More: While 20% can eliminate PMI, conventional loans offer options with down payments as low as 3%.
- Borrowers with a Stable Income and Employment History: Lenders will assess your debt-to-income ratio to ensure you can comfortably afford your mortgage payments.
- Buyers Looking for Flexibility: Conventional loans offer a wide range of options for different financial situations.
Conventional Loan Requirements
While specific requirements can vary by lender, here are the general criteria for a Conventional Loan:
- Credit Score: Typically a minimum credit score of 620, though higher scores will yield better rates.
- Debt-to-Income (DTI) Ratio: Generally, your DTI should be below 43-50%, though this can vary.
- Down Payment: Minimum down payments can be as low as 3%, but a 20% down payment will help you avoid PMI.
- Income and Employment Verification: Lenders will verify your income and employment history to ensure repayment ability.
- Property Appraisal: The home you are purchasing will need to be appraised to determine its value.
Types of Conventional Loans We Offer
Fixed-Rate Conventional Loans
Predictable payments for the life of the loan, ideal if you plan to stay in your home long-term.
Adjustable-Rate Conventional Loans (ARMs)
Lower initial rates with adjustable terms, perfect if you plan to sell or refinance in a few years.
Conventional Loan Refinance
Refinance to lower your rate, payment, or term, or switch from FHA to conventional to eliminate PMI.
How Conventional Loans Compare
| Loan Type | Down Payment | PMI Required? | Credit Score | Loan Limits |
|---|---|---|---|---|
| Conventional | 5–20% | Not if 20% down | 620+ | Up to $766,550 standard |
| FHA | 3.5% | Yes | 580+ | Up to FHA limits |
| VA | 0% | No | 620+ | No limits |
| USDA | 0% | Yes | 640+ | USDA area limits |
Personalized Mortgage
Solutions for Every State
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Secured their dream homes with Pegasus
$5B+
Mortgage Loans Funded across the USA.
20+ Years
of Trusted Mortgage Expertise.
Why Choose Pegasus Mortgage for Your Conventional Loan?
Instant
Pre-Approval
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Online Application
Fast
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Mortgage Terms
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FAQs on Conventional Loans
What is a Conventional Loan?
A Conventional Loan is a mortgage not backed by a government agency (like FHA or VA) but instead offered by private lenders. They are a popular choice for borrowers with good credit.
What are the credit score requirements for a Conventional Loan?
Generally, a minimum credit score of 620 is required, though higher scores often lead to better interest rates.
Do I need a 20% down payment for a Conventional Loan?
No, while a 20% down payment allows you to avoid Private Mortgage Insurance (PMI), you can qualify for a Conventional Loan with a down payment as low as 3%.
What is PMI and how does it relate to Conventional Loans?
PMI, or Private Mortgage Insurance, is typically required on Conventional Loans when your down payment is less than 20% of the home’s purchase price. It protects the lender if you default on your loan. Once you reach 20% equity in your home, you can usually request to have PMI removed.
Can I use a Conventional Loan for an investment property?
Yes, Conventional Loans can be used to finance investment properties, though the terms and requirements may differ slightly from a primary residence loan.
Can I refinance my current mortgage into a Conventional Loan?
Yes, our mortgage calculator and experts can help you explore refinancing options to switch to a Conventional Loan, potentially lowering your interest rate or changing your loan term.
Apply Now to Receive a Personalized Mortgage Quote
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