A conventional loan or mortgage is a broad term used to describe any loan not backed by a government agency, such as the Federal Housing Authority (FHA) or Veterans Administration (VA). These loans are instead backed by private mortgage lenders like Financial Concepts Mortgage.
When Are Conventional Loans a Good Fit?
Conventional mortgages are generally a good fit for homebuyers with a minimum credit score of 620, a debt-to-income ratio of 50% or less, and the ability to make a down payment of at least 20% (including closing costs).
Conventional Home Loans in Oklahoma, Kansas, Texas, Arkansas, and Alabama
Financial Concepts Mortgage is licensed to provide conventional mortgages in Oklahoma, Kansas, Texas, Arkansas, and Alabama. As of 2020, the conforming conventional loan limit for a single family home is $510,400. Keep in mind, your loan limit may differ based on the county you reside in and the type of home you purchase. Click the corresponding button below for a full breakdown of loan limits in your state.
Conventional Loan Benefits
- Minimum down payment can be as low as 3% for first-time homebuyers and as low as 5% for existing homeowners
- Private mortgage insurance (PMI) isn’t required with a down payment of at least 20%
- You can cancel PMI once you reach at least 20% equity on your home
- Adjustable and fixed-rate mortgages are available
- Mortgage term is typically 15, 20, or 30 years
- Interest rates are typically lower than FHA loans
Conforming vs. Non-Conforming Conventional Loans
Conventional loans can be both conforming and non-conforming. Conforming loans follow guidelines for loan limits as set by Fannie Mae and Freddie Mac. This limit varies from year-to-year and depends on your location. Conventional loans, FHA loans, and many other major loan programs can be considered conforming loans.
Non-conforming loans are conventional loans with higher loan values than Fannie Mae and Freddie Mac allow. These loans are called jumbo loans and are typically used to purchase high-value, luxury properties.
Prequalify For a Conventional Loan Today!
If you’re ready to take the next step toward owning your dream home, you can apply for a conventional home loan in Oklahoma, Kansas, Texas, or Arkansas online or over the phone. For more information about the different loans we offer, please contact us or visit us at one of our five convenient locations in central Oklahoma. Our team is here to walk you through the process and answer any questions you may have.