Flexible Financing for Every Texas Homebuyer
Conventional loans offer competitive rates, flexible terms, and the ability to cancel mortgage insurance once you reach 20% equity.
- Down payments as low as 3%
- Remove mortgage insurance at 20% equity
- Pre-underwritten for peace of mind
What Is a Conventional Loan?
A conventional loan is a mortgage not backed by a government agency. These loans follow guidelines set by Fannie Mae and Freddie Mac and are the most common type of home loan. Conventional loans offer flexibility in loan amounts, down payments, and property types, making them ideal for buyers with strong credit and stable income.
Who Is a Conventional Loan For?
- Homebuyers with credit scores of 620 or higher
- Borrowers with steady employment and income documentation
- Texas buyers purchasing primary residences, second homes, or investment properties
- Repeat buyers looking to upgrade or relocate
- Buyers who can afford a 3-20% down payment
- Those who want to avoid permanent mortgage insurance
Key Benefits of Conventional Loans
Low Down Payment Options
Put down as little as 3% with certain conventional programs.
Removable Mortgage Insurance
Cancel PMI once you reach 20% equity -- unlike FHA.
Pre-Underwriting Process
Q Mortgage pre-underwrites all conventional loans for certainty.
Higher Loan Amounts
Borrow up to 766,550 or higher with jumbo loans.
Flexible Property Types
Use for primary homes, second homes, or investment properties.
Conventional Loan Requirements
- Minimum credit score of 620 (higher scores get better rates)
- Debt-to-income ratio generally under 45-50%
- Steady employment history (typically 2 years)
- Down payment of 3-20% (or more to avoid PMI)
- Sufficient cash reserves (usually 2-6 months of payments)
- Property appraisal at or above purchase price
- Texas property must meet standard lending requirements
Is a Conventional Loan Right for You?
Choose Conventional If:
- Your credit score is 680 or higher
- You can afford at least 3% down
- You want the option to remove mortgage insurance later
- You are buying a second home or investment property
- Your loan is below 766,550 or you qualify for jumbo
Consider Alternatives If:
- Your credit score is below 620 -- explore FHA
- You have zero down and are VA-eligible -- VA loan is better
- You are buying rural Texas with lower income -- USDA offers zero down
- You want lower down payment with flexible credit -- FHA may work better
Frequently Asked Questions
Conventional Loans: Flexible Financing for Qualified Buyers
The most widely-used mortgage type -- competitive rates, flexible terms, and the ability to eliminate PMI once you reach 20% equity.
- Down payments as low as 3-5%
- PMI removable at 20% equity
- No upfront mortgage insurance premium
- Higher loan limits up to $766,550
NMLS# 2567464 -- Licensed Mortgage Lender in Texas. Q Mortgage specializes in matching buyers with the right loan program.
What Is a Conventional Loan?
A conventional loan is a mortgage not backed by a government agency -- instead it follows guidelines set by Fannie Mae and Freddie Mac. With a 20% down payment, you pay no PMI. With less than 20% down, PMI is required but can be removed once you reach 20% equity. Conventional loans offer more flexibility in property types and higher loan limits.
Who Is Best Suited for a Conventional Loan?
This program is designed for borrowers who fit the following profile:
- Buyers with credit scores 680+ seeking the best available rates
- Buyers putting 20% down to eliminate PMI entirely
- Investors purchasing rental or vacation properties
- Move-up buyers using equity from their current home
- Borrowers needing loan amounts above FHA limits
Conventional Loan Advantages
PMI Removal
Once you reach 20% equity, private mortgage insurance is permanently removed from your monthly payment.
Higher Loan Limits
Conventional conforming limits reach $766,550 in 2024, with higher amounts in certain high-cost counties.
Investment Properties OK
Conventional loans can finance second homes and rental investment properties -- FHA and VA cannot.
Best Rates with Strong Credit
With 740+ credit score and 20% down, conventional loans often offer the lowest interest rates available.
No Upfront MIP
Unlike FHA loans, conventional mortgages have no upfront mortgage insurance premium added to your balance.
Flexible Loan Terms
Choose from 10, 15, 20, or 30-year fixed-rate options, or adjustable-rate mortgages for shorter time horizons.
The Conventional Loan Process
Pre-Qualification
We review your credit score, income, assets, and DTI ratio to establish your qualifying loan amount.
Application
Complete your full mortgage application and submit required financial documentation for review.
Property Appraisal
A licensed appraiser confirms the property market value to support your purchase price.
Underwriting
The underwriter reviews all documentation and issues approval, subject to any outstanding conditions.
Closing Day
Sign the final closing documents, fund the loan, and receive the keys to your new home.
Conventional Loan Requirements
Make sure you meet these criteria before applying:
- Minimum 620 credit score (740+ recommended for best rates)
- Debt-to-income ratio typically under 45%
- Down payment: 3-5% minimum; 20% to avoid PMI
- Documented income: pay stubs, W-2s, 2 years tax returns
- Loan amount within conforming limits ($766,550 in 2024)
- Property must meet standard appraisal guidelines
- Reserves: 2-6 months PITI recommended for smooth approval
Conventional vs. Government Loans
| Factor | This Loan | Alternative |
|---|---|---|
| Credit score | 620 min (best rates at 740+) | FHA: 580 / VA: no minimum |
| Down payment | 3% minimum (with PMI) | FHA: 3.5% / VA: 0% |
| Mortgage insurance | PMI -- removable at 20% equity | FHA: MIP for life of loan |
| Property eligibility | Primary, second home, investment | FHA/VA: primary residence only |
| Loan amount | Up to $766,550 conforming | Subject to FHA county limits |