In general, conventional loans tend to impose more stringent credit requirements when contrasted with government-backed loans. Lenders commonly favor borrowers boasting a robust credit history and a higher credit score. Conventional Loans require a minimum of a 620 credit score but, we do work with some lenders that take as low as a 500 credit score with 10% down.

Although a 20 percent down payment is the norm, numerous fixed-rate conventional loans tailored for primary residences permit down payments as minimal as 3 percent or 5 percent. In cases where the down payment is less than 20 percent, borrowers are typically required to pay Private Mortgage Insurance (PMI), an extra fee incorporated into their payments.

Conventional loans come with borrowing limits, determined by the Federal Housing Finance Agency (FHFA), and these limits can vary based on the geographic area.

If your down payment is less than 20% of the home's purchase price, you might need to pay private mortgage insurance (PMI) to safeguard the lender in the event of default. As you accumulate sufficient equity, you can usually request the removal of PMI.

Interest rates for conventional loans can vary between lenders, influenced by factors such as credit score, down payment amount, and market conditions. It's crucial to explore multiple options to secure the most favorable interest rates and loan terms. When working with Capital, rest assured that we collaborate with the top 10 lenders in the country, enabling us to diligently shop for the best rate tailored to your situation.

Conventional loans offer diverse options, encompassing fixed-rate mortgages and adjustable-rate mortgages (ARMs). Fixed-rate mortgages maintain a consistent interest rate throughout the loan's lifespan, whereas ARMs feature a variable interest rate that may fluctuate at predetermined intervals.