Conventional Mortgage Loans
Make the dream of homeownership a reality and the process to get there more enjoyable with the support of the Union Square Mortgage team. Conventional mortgage loans are one of the most common mortgage loans, and Union Square offers competitive rates and multiple terms. Let us match you to the loan that best meets your need.
Overview
Conventional mortgage loans are sourced by a variety of lenders to individuals who meet qualifying credit criteria. For these reasons, conventional loans make-up the broadest—or most common—category of mortgage loans. Banks, credit unions, and mortgage companies extend conventional loans, and Fannie Mae, Freddie Mac, as well as other Government Sponsored Enterprises (GSEs) also hold many conventional loans.
Jumbo loans—loans for the most expensive homes with balances that exceed traditional conforming limits—and sub-prime mortgages for B-, C-, and D- credit borrowers are also included among conventional mortgage loans.
Additional Details
Down Payment: Typically, 5% is the minimum, required down payment. Some conventional loans may allow a down payment as low as 3%. However, a down payment of 20% or more is required to avoid private mortgage insurance (PMI).
Loan Term: The most common term is a 30-year mortgage. However, conventional loans also come in 10-year, 15-year, and 20-year terms.
Credit Requirements: Typically, 660 or better. Occasionally, as low as 620 (subprime).
PMI: Private mortgage insurance (PMI) protects the lender in the event a borrower defaults on a loan. Conventional loans often require PMI when a borrower makes a down payment less than 20 percent of a home’s purchase price or when refinancing and the home equity is less than 20 percent. Borrowers typically pay PMI—usually a monthly expense included in the mortgage payment—until reaching 80% LTV.
Conforming Loan Status: Mortgage loans that conform to GSE (Fannie Mae and Freddie Mac) guidelines are called conforming loans. Various criteria make-up these guidelines. A borrower’s loan-to-value ratio, debt-to income ratio, credit score and history are just a few. The most well-known guideline is the size of the loan, which as of 2023 was generally limited to $726,200 for single family homes in the continental U.S.
Loans that fail to meet GSE guidelines are called non-conforming loans. A loan which does not meet the guidelines specifically because the loan amount exceeds the limits is called a jumbo loan.
| Year | Historical Conventional Loan Limits | High Cost Area | |||
|---|---|---|---|---|---|
| Single Family | Two Family | Three Family | Four Family | Single Family | |
| 2022 | $647,200 | $828,700 | $1,001,660 | $1,244,850 | $970,800 |
| 2021 | $548,250 | $702,000 | $848,500 | $1,054,500 | $822,375 |
| 2020 | $510,400 | $653,550 | $789,950 | $981,700 | $765,600 |
| 2019 | $484,350 | $620,200 | $749,650 | $701,250 | $726,525 |
| 2018 | $453,100 | $580,150 | $701,250 | $871,450 | $679,650 |
| 2017 | $424,100 | $543,000 | $656,350 | $815,650 | $636,150 |
| 2016 | $417,000 | $533,850 | $645,300 | $801,950 | $625,500 |
| 2015 | $417,000 | $533,850 | $645,300 | $801,950 | $625,500 |
| 2014 | $417,000 | $533,850 | $645,300 | $801,950 | $625,500 |
| 2013 | $417,000 | $533,850 | $645,300 | $801,950 | $625,500 |
| 2012 | $417,000 | $533,850 | $645,300 | $801,950 | $625,500 |
| 2011 | $417,000 | $533,850 | $645,300 | $801,950 | $625,500 |
| 2010 | $417,000 | $533,850 | $645,300 | $801,950 | $625,500 |
| 2009 | $417,000 | $533,850 | $645,300 | $801,950 | $625,500 |
| 2008 | $417,000 | $533,850 | $645,300 | $801,950 | $625,500 |
Speak with a Union Square Mortgage professional to learn if a conventional mortgage loan is the right mortgage product for you!