Conventional Loan FAQs
We have the answers to the most common conventional loan questions.
Have questions about how to apply for a conventional loan?
We have answers. Please feel free to reach out directly to our loan officers if you have further questions. We look forward to hearing from you!
What is a conventional loan?
One of the most common types of loans that home buyers come across is the conventional loan. These loans aren’t backed by the government, like FHA and VA loans. Conventional loans follow the guidelines that Fannie Mae and Freddie Mac - two agencies responsible for standardizing mortgage lending - have set. But it’s lenders, such as banks, that are responsible for approving your conventional loan. Here's a blog that explains more about conventional loans.
What is the minimum required loan amount?
A minimum loan amount of $175,000 is required to apply. Exceptions include mortgage products for properties located within the Greater Kansas City metro and surrounding areas. Contact a NASB Loan Officer for details on the excluded areas and/or zip codes.
What documentation do I need for a conventional loan?
Among the documentation you may need for a conventional loan are:
- Copy of driver’s license
- Two years full tax returns if self-employed - all pages and all schedules
- Two years W2's
- Two most recent pay stubs with year-to-date pay
- Two most recent asset statements - all pages with full transaction history
- Copy of your mortgage statement if you currently own
What types of homes can I purchase with a conventional loan?
You can purchase property types such as: single family homes, condos, and townhomes. These homes can be purchased as primary residences, second homes or investment properties.
Will I need mortgage insurance with a conventional loan?
Private mortgage insurance (PMI) is typically required on a conventional loan any Fannie Mae/Freddie Mac loan when there is less than a 20% down payment.
What credit score do I need to qualify for a conventional loan?
Credit score requirements for conventional loans vary from lender to lender, but a conventional loan may require on average a higher credit score than an FHA loan.
How much do I need for a conventional loan down payment?
The minimum down payment amount for a conventional loan is 3% for a fixed-rate mortgage, and 10% for adjustable rate mortgages. It is best to have as much saved up as possible for a conventional loan down payment as a down payment of 20% or more can eliminate the need to pay monthly private mortgage insurance ('PMI').
How much can I borrow with a conventional loan?
Conventional loan limits are set by Fannie Mae and Freddie Mac and can vary by different areas in the U.S. To see what the loan limit is in your area, click here.
What are the benefits of a conventional loan?
Conventional loans may offer some of advantages to other loan types. They require down payments as low as 3%, there may be less paperwork, and you will not have monthly primary mortgage insurance ('PMI') with a down payment of at least 20%.
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