What is Conventional?

A conventional mortgage is a home loan that is not insured or guaranteed by the federal government. Conventional loans typically require higher credit scores and larger down payments than government-backed loans, but they offer more flexibility in terms of property types and loan amounts. Conventional loans conform to guidelines set by Fannie Mae and Freddie Mac, with loan limits up to $766,550 in most areas ($1,149,825 in high-cost areas like parts of Washington). Private mortgage insurance (PMI) is required with less than 20% down but can be removed once you reach 20% equity.

Why Choose Conventional Loans?

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Flexible Terms

Choose from 15, 20, or 30-year fixed-rate mortgages to match your financial goals.

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Lower Rates

Competitive interest rates for borrowers with good credit and stable income.

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Larger Loan Amounts

Finance higher-priced homes with loan limits up to $766,550 in most areas.

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Great for 2nd Home & Investment Properties

Perfect financing option for vacation homes and rental properties.

Fast Approval

Streamlined underwriting process for qualified borrowers with strong credit.

No Upfront Mortgage Insurance

With 20% down, avoid monthly PMI payments and reduce your monthly costs.

Conventional Loans Requirements

Basic Qualifications

  • Credit Score: Contact Q Home Loans for details (higher scores get better rates)
  • Down Payment: 3% minimum (5% for investment properties)
  • Debt-to-Income Ratio: Typically 43%-50% maximum
  • Reserves: 2-6 months of mortgage payments in savings (varies by loan type)
  • PMI: Required with less than 20% down (can be removed later)

Required Documents

  • Pay stubs (last 30 days)
  • W-2 forms (last 2 years)
  • Tax returns (last 2 years)
  • Bank statements (last 2 months)
  • Investment/retirement account statements
  • Rental income documentation (if applicable)

How It Works

Conventional loans follow guidelines set by Fannie Mae and Freddie Mac, which purchase loans from lenders on the secondary market. This system provides liquidity to lenders and keeps interest rates competitive. With less than 20% down, you'll pay private mortgage insurance (PMI), which typically costs 0.5%-1% of the loan amount annually. Once you reach 20% equity through payments or appreciation, you can request PMI removal. Conventional loans offer the most flexibility in property types and can be used for primary residences, second homes, or investment properties.

Who Should Consider Conventional Loans?

Strong Credit Borrowers

Excellent credit history and stable income seeking the best rates

Repeat Homebuyers

Have equity from previous home to use as down payment

Investment Property Buyers

Want to purchase rental properties or vacation homes

High-Income Earners

Exceed income limits for government-backed programs

Frequently Asked Questions

Get answers to common questions about conventional loans.

Ready to Get Started?

Q Home Loans specializes in conventional loans for homebuyers and investors in Washington. Get expert guidance and competitive rates.

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