Buying a home is an exciting journey—but figuring out how to finance it can feel overwhelming. If you’ve started exploring your options, you’ve likely heard about conventional loans. Let’s break down what they are, how they work, and why they may be the right choice for many homebuyers.
A conventional mortgage is a loan not backed by government programs like FHA, USDA, or VA loans. Instead, it’s offered by private lenders such as banks, credit unions, and mortgage companies like ALCOVA Mortgage. These loans follow guidelines from Fannie Mae and Freddie Mac, providing flexibility and competitive rates for borrowers with solid credit and income.
When you take out a conventional loan, you borrow a specific amount to cover your home purchase and repay it—plus interest—over a set term, typically 15, 20, or 30 years.
If your down payment is less than 20%, you may pay private mortgage insurance (PMI), but if you put down 20% or more, PMI can typically be avoided. ALCOVA’s conventional loans offer this flexibility while enabling optional fixed- or adjustable-rate terms based on your preferences.
Most lenders require a credit score of at least 620, but a score around 700 or higher usually earns you better interest rates and terms.
Your DTI ratio—your existing monthly debts compared to your income—typically needs to be around 43% or lower, though qualified borrowers with compensating factors may still qualify.
Here’s why so many homebuyers turn to conventional loans:
Ensure your credit score is strong and your debt load manageable. Clearing up any inaccuracies in your credit report can help improve your terms.
ALCOVA’s CAN-DO Pre-Approval gives you a conditional loan commitment—making your offer more credible to sellers.
Explore conventional, FHA, USDA, and VA loans to find your best fit. Use ALCOVA’s mortgage calculators to compare scenarios.
Gather proof of income (paystubs, tax returns), asset documentation, ID, and any additional information to strengthen your application.
Submit your application and, once approved, consider locking your rate to protect against market fluctuations.
| Feature | Why It Matters |
|---|---|
| Competitive Rates | Keep payments low over the life of the loan |
| 3% Down Payment | Enter the market sooner with minimal upfront cost |
| Avoid PMI at 20% | Reduce monthly payment burden |
| Flexible Property Eligibility | Use the loan for most property types |
| Personalized Tools & Programs | Benefit from ALCOVA’s tailored support and innovation |
A conventional loan offers a flexible, cost-effective financing solution—especially if you have good credit and want customizable terms. With ALCOVA Mortgage, you gain access to low down payments, competitive rates, and innovative programs like Trade-In Mortgage™, Job Gap Protection, and CAN-DO Pre-Approval—all tailored to create a smoother, more empowering homebuying experience.
Ready to take the next step? Get pre-approved today to see how a conventional loan can help you reach your homeownership dreams.
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