A conventional mortgage loan is a type of home loan that is not insured or guaranteed by a government agency. Unlike loans backed by agencies like the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA), conventional mortgage loans are underwritten and serviced by private lenders, such as banks, credit unions, and mortgage companies. These loans are popular among borrowers who have good credit scores and stable financial situations.
Key features of conventional mortgage loans include:
Conventional mortgage loans offer flexibility in terms of loan amount, property type, and repayment options. However, the higher down payment and credit requirements can make them less accessible to some borrowers compared to government-backed loans. It's important for borrowers to shop around, compare rates and terms from different lenders, and carefully consider their financial situation before choosing a mortgage option.