What is a Conventional Mortgage?

A conventional loan is the traditional home mortgage most Americans get when buying a home. It is a private-sector mortgage, meaning it is not guaranteed or insured by the government. Instead, it is available through banks, credit unions, and mortgage companies like Desert Canyon Mortgage.

Benefits of a Conventional Mortgage?

The benefits of utilizing a conventional mortgage are numerous.


Our loans conform to Fannie Mae and Freddie Mac guidelines so there is peace of mind that your loan is secure.


Conventional loans have less stringent underwriting requirements which could mean less documentation and an easier approval.


There are a number of options for rates, loan terms, and property types based on your specific goals and needs.

Conventional Loan Characteristics

Down Payment: As low as 3%. Contrary to popular belief, the most common down payment is 5%, not 20%. However, when you put 20% down, it allows you to avoid mortgage insurance altogether.

Loan Options: There are fixed rate or adjustable rate options in loan terms ranging from 10, 15, 20, 25, and 30 years based on your specific goals and needs.

Property/Residency Types: Conventional mortgages allow for primary residences, second homes, and investment properties for 1-4 unit dwellings.

Mortgage Insurance: If the down payment is less than 20%, the mortgage payment will include mortgage insurance. This will be automatically removed when the equity of the home reaches 78% loan to value. The loan can also be refinanced to have the mortgage insurance removed if the value of the home has increased.

Ideal Candidates for a Conventional Loan

Borrower: First-time homebuyer, repeat homebuyer or investor. You may also include a co-signer if needed.

Credit score: Minimum credit score is usually 620 (depending on the lender) but the higher the credit score, the lower the interest rate and mortgage insurance.

Assets: A larger down payment allows for a lower monthly payment.

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Next Steps to Getting a Conventional Mortgage:

If you believe you are eligible for a conventional mortgage, the next step will be booking an appointment with Desert Canyon Mortgage to start the homebuying process. We recommend reviewing our homebuying timeline and pre-approval document checklist before making an appointment. Once complete, click HERE to start the loan application process.