Loans
Conventional Loans
A conventional loan is a home loan that is not backed by the government. It is the most common kind of home loan, and many first-time and repeat buyers use one. Deb Gontko Klein helps buyers weigh a conventional loan against other options, so the choice fits your plans and your budget. Serving home buyers in Arizona, California & Colorado since 2004.
Who it helps
- Buyers with steady income and a fair to strong credit history.
- Buyers of a primary residence, a second home, or a rental home, if you qualify.
How it works
Down payment: The amount you need to put down can vary with your credit, income, and the home. Typically, the minimum down payment is 5% but it can be as low as 3% in certain circumstances.
Mortgage insurance: If your down payment is less than 20%, you may pay private mortgage insurance, called PMI. PMI protects the lender, not you, if the loan is not paid back. The cost of PMI is typically added to the monthly mortgage payment. Once you’ve built sufficient equity in your home, it may be possible to ask for it to be removed later, if you qualify.
What lenders check: Your income, debts, credit history, and the home’s value. You will be asked for documentation such as pay stubs, bank statements, and tax records.
Things to think about
- A larger down payment can mean a smaller loan and may lower your monthly cost, but it also leaves you with less cash on hand. Weigh both sides before you decide.
- Rates and costs change. Ask for the full cost in writing, including PMI, before you commit.
Questions people ask
What is a conventional loan?
A home loan made by a private lender that is not backed by a government program. The lender checks your income, debts, and credit to decide if you qualify.
Do I need a large down payment?
Not always. The amount varies. Talk with Deb about what you have saved and what you may qualify for before you rule this loan out.
Can I use a conventional loan for a second home?
It may be possible, if you qualify. Terms can differ from a loan for a primary residence, so ask what applies to your plans.
Next step: Not sure which loan fits? Call Deb at (480) 550-0211 for a plain-words look at your options, or apply through Planet Home Lending.
Official source: Consumer Financial Protection Bureau: Owning a Home
Get Started
Talk with Deb
Tell us what you want to do, and we will call you back with clear next steps. It takes about a minute. Prefer to talk now? Call (480) 550-0211.
Serving home buyers in Arizona, California & Colorado since 2004