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Overview of conventional loans

A conventional loan is a mortgage offered by private lenders without a guarantee from the federal government. These loans are a good choice for buying homes when you have good credit, good finances, and money for a down payment.

You can buy a primary home, vacation home, rental property, or investment property with a conventional loan. You can often borrow more money with a conventional loan than you can with some types of government-backed mortgages. You can also avoid paying for mortgage insurance with a conventional loan when you make a down payment of 20% or more.

Use our mortgage affordability calculator to estimate how much you can afford to pay for a home based on your down payment, interest rate, and loan term. Freedom Mortgage was a top residential lender in the United States according to Inside Mortgage Finance in 2021.

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Competitive rates with good credit

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Finance more kinds of homes

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Larger loan amounts

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No mortgage insurance with 20% down payments

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How much home can you afford?

When you’re thinking about buying a home, figuring out how much you can afford is a great first step. Use our home affordability calculator to get an estimate!

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This calculator is made available as a self-help tool for your personal use. We do not guarantee its accuracy or applicability to your individual circumstances. Resulting calculations are for illustrative and informational purposes only and are not intended as investment or financial advice. Consult a qualified financial advisor before making important personal finance decisions. To get a better understanding of the benefits of buying a home, speak with a loan advisor at Freedom Mortgage.

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Ask us what conventional loan rate we can offer you!

When you have good credit, you can often get competitive rates on conventional loans. Your interest rate is also affected by your income and finances as well as the current mortgage market environment. Freedom Mortgage may be able to offer you a conventional rate that is lower – or higher – than the rates you see advertised by other lenders. Ask us what rate we can offer you!

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Is a conventional home loan right for you?

Freedom Mortgage offers conventional loans to help you buy a home. We also offer VA, FHA, and USDA loans to qualified homebuyers. Need help deciding which loan is right for you? See our loan comparison below.

We also have useful loan comparison articles. Read more about VA loans versus conventional loans and FHA loans versus conventional loans.

Conventional Loans

  • All qualified homebuyers are eligible
  • Can buy primary homes, vacation homes, and more
  • Down payments required
  • Mortgage insurance required with down payment less than 20%

VA Loans

  • Only qualified veterans, active duty military personnel, and surviving spouse are eligible
  • Can buy primary homes only
  • Down payments often not required
  • Mortgage insurance not required
Learn More

FHA Loans

  • All qualified homebuyers are eligible
  • Can buy primary homes only
  • Down payments required
  • Mortgage insurance required
Learn More

USDA Loans

  • Only qualified rural & some suburban homebuyers are eligible
  • Can buy primary homes only
  • Down payments often not required
  • Mortgage insurance required
Learn More

Looking for more detail?

Our full loan comparison table can help you decide.

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Conventional loan fees and requirements

To get your conventional loan approved, you will need to complete an application and provide documents that show you meet your lender’s credit, income, and financial requirements. You’ll need to make a down payment and pay closing costs. Here’s what else you need to know.

Credit score

We will probably check your credit score before we approve your mortgage application. Your credit score can affect the interest rate we may offer too.Learn about credit scores to buy houses

Down payments

With a conventional loan, you might be able to make a down payment as low as 3%. Lenders may require higher down payments however. Also remember you will need to pay for mortgage insurance if your down payment is less than 20%. Learn about down payments

Loans limits

Conventional loans have a "conforming" loan limit which is $548,250 in 2021. You may be able to borrow more than these limits allow if you get a jumbo loan.Learn about jumbo loans

Private mortgage insurance

With a conventional mortgage, you need a down payment of at least 20% or you will need to pay for private mortgage insurance (PMI). According to Freddie Mac, homeowners can expect mortgage insurance to cost between $30 and $70 per month for every $100,000 they borrow.Learn about PMI

Closing costs

You’ll often pay between 2% and 5% of the purchase price in closing costs with a conventional loan according to Freddie Mac. These costs can include lender and appraisal fees, discount points, title search fees, property taxes, homeowners insurance premiums, and more.Learn about closing costs

Loan disclosures and closing

Once you submit your application, you will need to review and sign Loan Disclosures. You’ll also need to attend the closing of your new mortgage.Learn about loan disclosures

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The Freedom Mortgage Difference

We are committed to making you a life-long customer with exceptional mortgages and exceptional service!

We’ll help you choose the right mortgage and work with you to make buying a home or refinancing easy. We'll also keep an eye on your rate and let you know when you can lower your payment or get cash from your home's equity.

We are thankful for our 1.5 million customers. It’s because of homeowners like you that we’ve grown over the past 30 years to become one of the top lenders in America.

We are proud to support veterans and service members with charitable work like raising $93,000 to buy school supplies for military families. We are also committed to fighting hunger in communities across the nation.

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