Conventional Loans in Arizona & Texas
A widely used loan option not backed by the government, with more choices for buyers who qualify.
What Is a Conventional Loan?
A conventional loan is a mortgage that isn't insured or guaranteed by a government agency like the FHA or VA. Instead, it follows guidelines set by Fannie Mae or Freddie Mac. Here at Efinity Mortgage, we work within those guidelines to find the conventional option that best fits each client's situation, whether that means a low down payment program or standard financing.
Who Conventional Loans Are Often a Good Fit For
- Buyers with an established credit history
- Buyers who want to avoid FHA's upfront and long-term mortgage insurance costs
- Buyers purchasing a second home or investment property, since these generally require a conventional loan
- Buyers who can put down 20% or more and want to avoid mortgage insurance entirely
Down Payment & Mortgage Insurance
Conventional loans no longer have a fixed minimum credit score requirement, since Fannie Mae and Freddie Mac moved to reviewing a borrower's full financial profile instead of a single cutoff. That said, a lower credit score generally means a higher monthly private mortgage insurance (PMI) cost if your down payment is under 20%, so it's worth reviewing your numbers together.
Some programs allow a down payment as low as 3% for eligible first-time buyers, though 5% is more common. If your down payment is less than 20%, you'll need PMI, but unlike FHA mortgage insurance, conventional PMI can be canceled once you reach 20% equity in your home.
Conventional Loans & Down Payment Assistance
Conventional loans can sometimes be paired with down payment assistance programs, depending on your eligibility and the specific program.
Is a Conventional Loan Right for You?
Every borrower's situation is different. Reviewing your income, credit, and goals together is the best way to know whether a conventional loan, or another program, fits what you're trying to do.
Common Questions
What credit score do I need for a conventional loan?
There's no longer a fixed minimum score requirement, since lenders now review your full financial profile instead of a single cutoff. That said, a lower score generally means a higher monthly PMI cost if your down payment is under 20%, so it's worth reviewing your specific situation together.
How much do I need for a down payment?
Some programs allow as little as 3% down for eligible first-time buyers, though 5% is more common. It's worth reviewing your specific options together.
Do I have to pay mortgage insurance?
Only if your down payment is less than 20%. Unlike FHA loans, conventional PMI can be canceled once you reach 20% equity.
What's the difference between a Conventional loan and an FHA loan?
Conventional loans aren't government-insured, and their mortgage insurance can be canceled once you reach 20% equity. FHA loans are government-insured with more flexible guidelines, but the mortgage insurance can last for the life of the loan. Learn More About FHA Loans