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Residential Mortgage
Conventional Mortgages
A traditional mortgage not insured by the federal government. Ideal for borrowers with strong credit and stable income who want competitive rates and flexible terms.
Is This Loan Right for You?
A conventional mortgage is right for you if you have a credit score of 620 or higher, stable income, and can put at least 3% down. It offers the most flexibility in terms and the ability to drop mortgage insurance once you reach 20% equity. Conforming loan limits are set at $806,500 for most areas by the FHFA, with higher limits up to $1,209,750 in high-cost counties like parts of Los Angeles. You can choose between fixed-rate and adjustable-rate options for 15- or 30-year terms, and finance primary residences, second homes, or investment properties — something FHA and VA loans do not allow. Unlike FHA loans that charge mortgage insurance for the life of the loan when you put less than 10% down, conventional PMI is removable once your equity reaches 20%. Choose conventional if you have solid credit and want the broadest property eligibility with long-term cost savings.
Side-by-Side
Conventional vs Government-Backed Loans
Conventional loans offer unique flexibility for second homes, investment properties, and borrowers with strong credit.
| Feature | Conventional | Government-Backed (FHA/VA) |
|---|---|---|
| PMI | Removable at 80% LTV | FHA MIP for life / VA funding fee |
| Property Types | Primary, secondary, investment | Primary residence only |
| Renovation Options | HomeStyle Renovation | FHA 203(k) |
| Second Homes | Allowed | Not allowed |
| Investment Properties | Allowed | Not allowed |
| Loan Limits | $806,500 per FHFA | FHA varies by county |
| Seller Concessions | 3-9% | FHA 6% / VA unlimited |
| PMI Cost | 0.2-1.5% (removable) | FHA 0.55% MIP for life |
You Only Need 3% Down for a Conventional Loan (Here's the Catch)
Requirements
What Are the Conventional Requirements?
Min Credit Score
620+
Min Down Payment
3%
Max LTV
97%
Max DTI
45%
Loan Limits
$806,500 (2026 FHFA conforming limit; higher in high-cost areas)
PMI / MIP
PMI required if less than 20% down; removable at 20% equity
Occupancy
Primary, secondary, or investment property
Features
Key Features
- Down payments as low as 3% for qualified buyers
- No upfront mortgage insurance premium
- PMI removable once equity reaches 20%
- Available in fixed-rate and adjustable-rate options
- Conforming loan limits set by FHFA
Process
How It Works
1
Pre-Qualification
We review your credit, income, and assets to estimate how much home you can afford and identify the best conventional program for your situation.
2
Application & Documentation
Complete your full application and submit W-2s, pay stubs, bank statements, and tax returns. We lock your rate and order the appraisal.
3
Underwriting & Approval
Our underwriting team verifies all documentation, reviews the appraisal, and issues a conditional approval with any remaining items needed.
4
Closing & Funding
Sign your final loan documents, wire your down payment and closing costs, and receive the keys to your new home.
Estimate Your Payment
20%
Results
Principal & Interest$2,128.97
Property Tax$416.67
Insurance$150
Total Monthly Payment$2,695.64
This information is not intended to be an indication of loan qualification, loan approval or commitment to lend. Rates, terms, and availability of programs are subject to change without notice.
Pros & Cons
What Are the Pros and Cons of Conventional?
Advantages
- PMI can be removed once you reach 20% equity, unlike FHA MIP
- No upfront mortgage insurance premium saves thousands at closing
- Wide range of property types eligible including investment properties
- Competitive rates for borrowers with strong credit profiles
Considerations
- Higher credit score requirements than FHA (620 vs 580)
- PMI rates can be higher than FHA MIP for lower credit scores
- Stricter debt-to-income ratio requirements for some programs
FAQ
Frequently Asked Questions
Most conventional loan programs require a minimum credit score of 620. However, better rates are available at 740 and above. Scores between 620-679 may still qualify but will pay higher PMI premiums.
Private Mortgage Insurance (PMI) is required when your down payment is less than 20%. You can avoid PMI by putting 20% down, or you can request PMI removal once your loan balance reaches 80% of the home's original value. PMI is automatically removed at 78%.
For 2026, the conforming loan limit is $806,500 for most areas and up to $1,209,750 in high-cost areas like parts of Los Angeles County. Loans above these limits require a jumbo mortgage.
Yes. Conventional loans allow financing for primary residences, second homes, and investment properties. Investment properties typically require 15-25% down and have slightly higher interest rates.
A fixed-rate loan keeps the same interest rate for the entire term (15 or 30 years). An adjustable-rate mortgage (ARM) starts with a lower fixed rate for an initial period (5, 7, or 10 years) then adjusts periodically based on market indices.
Your borrowing capacity depends on your income, debts, credit score, and down payment. Generally, your total monthly debts including the new mortgage should not exceed 45% of your gross monthly income.
Local Expertise
Getting a Conventional Loan in the San Gabriel Valley
NetCORE Lending™ is headquartered in Diamond Bar and has been helping borrowers across the San Gabriel Valley secure conventional financing since 2015. We serve homebuyers and homeowners in Pomona, Walnut, Rowland Heights, West Covina, Chino Hills, Covina, La Verne, Glendora, San Dimas, Hacienda Heights, and City of Industry — as well as borrowers throughout California.
As a local mortgage broker, we understand the San Gabriel Valley real estate market — from the higher-value properties in Chino Hills and Diamond Bar to the more affordable options in Pomona and West Covina. Our team provides bilingual service in English and Vietnamese and shops 100+ wholesale lenders to find you the lowest available rate on your conventional loan.
Call (714) 399-6361 to discuss conventional options with a local loan advisor, or get pre-qualified online in 2 minutes.
Related
Also Consider
Explore other loan products that might be a good fit for your needs.
FHA
Government-backed loans insured by the Federal Housing Administration. Designed for first-time homebuyers and those with lower credit scores or smaller down payments.
Fixed-Rate
Lock in a consistent interest rate and monthly payment for the entire life of your loan. Available in 15 or 30-year terms, providing long-term payment stability.
Jumbo
Financing for high-value properties that exceed conforming loan limits. Ideal for luxury homes and high-cost real estate markets in Southern California.
Refinance
Replace your existing mortgage with a new loan to lower your rate, reduce monthly payments, shorten your term, or access your home equity through cash-out refinancing.
Ready to Get Started?
Apply online in minutes or call us to speak with a loan advisor about your Conventional options.
Official Sources
This information is not intended to be an indication of loan qualification, loan approval or commitment to lend. Rates, terms, and availability of programs are subject to change without notice.
Reviewed by Joann Ton, Loan Officer (NMLS# 1461031) | Last updated: June 2026