<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=1955936548054264&amp;ev=PageView&amp;noscript=1">

Everything You Need to Know About Conventional Mortgages

< Back to Articles | Time to Read: 5 minutes

There are many different types of home loans so how do you know what is right for you? It can be an overwhelming process to think about so here’s everything you need to know about one of the most common mortgages available.

Let’s Start from the Beginning

Nearly 70 percent of all new home sales were financed using conventional home loans in 2019 according to the most recent Quarterly Sales by Price and Financing by the U.S. Census Bureau. This type of home loan is not insured or guaranteed by a government entity (like an FHA loan) but is backed by private lenders.

The two types of conventional mortgages are:

  • Conforming Home Loan: This means the loan amount falls within the limits set by the government-sponsored loan programs. This type of conventional loan backs most of the mortgages available in the U.S.
  • Non-conforming Home Loan: These are the types of mortgages that do not fit into the guidelines of a conforming home loan. They are often called jumbo loans since they typically represent larger mortgages. Non-conforming loans are more common in high-cost areas and require in-depth documentation in order to qualify.

Loan Terms

There are a variety of options of conventional loan terms ranging from 10 to 30 years. Your loan term is how long you will be paying for your mortgage. So, if you take out a 30-year mortgage and pay each month, as directed, it will take you 30 years to pay off your mortgage. While it is true that most people are more familiar with the 30-year mortgage, there are other options available. For example, a 15 or 20-year mortgage may be a better option for you based on your long-term financial goals.


The basics: Longer loans will have lower monthly payments, but you pay for a longer amount of time. With longer loan terms you will end up paying more interest over the life of the loan. Shorter loans have higher monthly payments, but you pay for a shorter amount of time. With shorter loan terms, you will pay less interest over time which ultimately saves you money over the life of the loan.



Conventional loan requirements vary from lender to lender so your first step to getting qualified for a conventional home loan is to talk to a Home Loan Specialist. Conventional loans are typically a good fit for someone who has a higher credit score (or no score if you are debt-free), a stable income, solid employment history, and down payment of at least three percent.




Private Mortgage Insurance (PMI)

Down payments are required for conventional home loans. In fact, as mentioned earlier- you will need to put at least 3 percent of the home’s purchase price down. If you put less than 20% down of the home’s purchase price, you will pay Private Mortgage Insurance. If you cannot put 20% down when buying a home, you can still reduce the amount of PMI you pay each month by putting some money down (the more, the better in this situation).


There are advantages if you choose to go with a conventional home loan. For example, you can use conventional loans for a variety of property types: single and multi-family homes, condos, and manufactured homes. You have lots of options!

Another advantage is you can avoid paying up-front mortgage insurance (like you would pay with an FHA loan) and possibly the monthly private mortgage insurance (PMI) if you have a 20% down payment. Even if you don’t have the initial 20% down payment, you will be able to remove PMI once the loan-to-value ratio reaches less than 78 percent.

Good News for Home Buyers

Rates are staying low which is good news for home buyers as home prices rise. Yes, we have seen rates fluctuate up here and there, but ultimately, they are remaining historically low. And while it is easier to score a good deal on a home loan with lower rates, the interest rate you end up with on your conventional loan has more to do with just the economy and current market trends.




To get the best rate available make sure you are in-the-know about your credit score and debt-ratio. Other factors that will contribute to your rate are home price, loan amount, down payment amount, loan term, etc.

If you have questions about conventional home loans or would like to compare you mortgage options, fill out the form below and we’ll connect you with a Home Loan Specialist licensed in your state.

Are you buying a home or refinancing?

Where are you planning to buy a home?

Please Select a State

What is your full name?

Please Enter a Name
Please Enter a Last Name

What is your email address?

Please Enter a Valid Email Address
  We won't share your information.

Next, we need to verify a phone number.

Enter a Valid Phone Number
Please Select a Message Type

Enter your phone number and we'll text you a 6-digit security code to verify it's you. Standard texting and data rates may apply. For more information, read our Privacy Policy.

Enter the 6-digit code sent to your device.

 Code sent to +1234567890

Finally, how did you hear about us?

Please Select an Option

By submitting this form, I/we agree to your Privacy Policy Terms of Use and authorize Churchill Mortgage Corporation and/or their Preferred Provider for our area and/or The Churchill Agency to receive the above information to assist in obtaining a home loan.

I/we also authorize Churchill Mortgage Corporation, The Churchill Agency and/or their Preferred Provider for our area to contact us regarding but not limited to mortgage and insurance services and products via telephone, mobile phone (including through automated dialing), and/or email, even if telephone numbers or email I/we provide are on any Do Not Call/Contact Registry, such as corporate, state, or the National Do Not Call Registry. The submission of this form does not constitute in any way a formal loan application or a commitment for a loan. By communicating with us by phone, you consent to calls being recorded and monitored. By participating, you consent to receive text messages sent by an automatic telephone dialing system. Consent to these terms is not a condition of purchase.

Your answer will NOT negatively affect your mortgage application. Your answer does not mean the Lender or Other Loan Participants agree to communicate or provide documents to you in your preferred language. However, it may let them assist you or direct you to persons who can assist you. Language assistance and resources may be available through housing counseling agencies approved by the U.S. Department of Housing and Urban Development. To find a housing counseling agency, contact one of the following Federal government agencies. U.S. Department of Housing and Urban Development (HUD) at (800)569-4287 or www.hud.gov/counseling

Es probable que su transacción de préstamo hipotecario suceda en inglés. Por medio de esta pregunta, solicitamos información para determinar si existen comunicaciones disponibles a su servicio, en su idioma preferido. Sírvase tener en cuenta: posiblemente NO hay comunicaciones disponibles en su idioma preferido.

Thank You!

Thank you for choosing Churchill Mortgage to help you with your home loan needs!

Our team is already hard at work connecting you with your Home Loan Specialist. Rest assured that we've received your request and will be in touch with you shortly.

social proof logos

Already working with someone at Churchill?

Find Your Home Loan Specialist

Please Select a Loan Officer