Conventional Loans

A conventional loan is a mortgage that is not insured or guaranteed by a government agency and usually follows Fannie Mae or Freddie Mac guidelines. It is the most common way to buy or refinance a home.

Justin Lazzaro, NMLS #1229453 | Reasy Financial, LLC, NMLS #2446155 | Licensed in Arizona, Pennsylvania, Florida, and Texas

Who a conventional loan fits

Conventional financing rewards solid credit and documented income. It covers more property types and occupancy types than any government program.

Buyers with established credit

Pricing and mortgage insurance costs improve as your credit profile and down payment get stronger.

Second homes and rentals

Conventional loans can finance a primary residence, a second home, or an investment property, which most government programs cannot.

Who it usually does not fit

If your credit is still recovering or your down payment is small, an FHA loan may cost less each month. I run both side by side.

How qualifying works

1

We document income and assets

Pay stubs, W-2s, tax returns if you are self-employed, and statements for the funds you plan to use.

2

Software reviews the file

Your file runs through Fannie Mae or Freddie Mac underwriting software, which weighs credit, income, debts, and assets together.

3

An underwriter confirms it

A person verifies the documents, the appraisal, and the title work before issuing a final approval.

Conforming loan limits are set each year by the Federal Housing Finance Agency and vary by county. Loan amounts above the limit fall under jumbo financing.

How it compares to other loans

The main differences between these loans are who backs them and how flexible the credit guidelines are.

How conventional loans compare to other loan types
Loan typeWho backs itOften a fit for
Conventional loansPrivate lenders, following Fannie Mae or Freddie Mac guidelinesBorrowers with established credit and documented income
FHA loansInsured by the Federal Housing AdministrationBorrowers rebuilding credit or with a smaller down payment
VA loansGuaranteed by the Department of Veterans AffairsEligible veterans, service members, and surviving spouses
Jumbo loansPrivate lenders, above the conforming loan limitHigher priced homes

Three things to know before you apply

1

Mortgage insurance can come off

With a smaller down payment you will likely pay private mortgage insurance. Unlike FHA, it can usually be removed once you build enough equity.

2

Credit drives the price

Conventional pricing is tiered by credit score and down payment. A modest improvement in either can change your cost, so timing matters.

3

Condos get extra review

The condo project itself has to meet guidelines, not only you. I check the project early so it does not surprise you late.

Guidelines change. I confirm current requirements with the lender before quoting anything.

Common questions about conventional loans

Short answers to common questions. Program rules vary by lender, so treat these as general guidance, not a loan decision.

How much do I need to put down?

It depends on the property and your profile. Primary residences allow the smallest down payments, while second homes and investment properties require more.

Can I use gift funds?

Usually, yes, for a primary residence or second home. The gift has to come from an eligible donor and be documented with a signed gift letter.

Can I buy a second home or rental?

Yes. Conventional financing covers second homes and investment properties, with higher down payment and reserve requirements than a primary residence.

What if I am self-employed?

You can qualify with tax returns. If your returns understate what you earn, a bank statement loan may be a better fit.

Can I refinance with a conventional loan?

Yes. Rate and term refinances and cash-out refinances are both available, subject to equity and credit guidelines.

Where do you offer these loans?

I am licensed in Arizona, Pennsylvania, Florida, and Texas, and I compare conventional pricing across multiple wholesale lenders.

Ready to talk it through?

Pick a time that works for you. We'll go over your goals and next steps, no pressure, just a conversation. Prefer to call or text instead? Reach me directly at (412) 638-4982, or book a quick Zoom if that's easier.