A conventional mortgage is the most common home loan type — and understanding what lenders look for makes the whole process a lot less mysterious.
Credit Score
Most lenders want to see a credit score of at least 620 to approve a conventional loan. A higher score generally opens the door to better terms — a lower rate or more flexibility on other requirements. If your score is lower than 620, there may be other loan programs worth exploring, but for a conventional mortgage, that threshold is typically the starting point.
The most reliable way to maintain or improve your score is straightforward: pay your bills on time, keep credit card balances low relative to your limits, and avoid opening new accounts right before you apply.
Down Payment
Conventional loans require a down payment, but the commonly cited 20% figure isn't the floor. Many lenders offer conventional programs with down payments as low as 3% to 5%, depending on the loan and your qualifications.
The reason 20% comes up so often: when you put down less than 20%, you'll typically be required to carry private mortgage insurance (PMI). PMI protects the lender — not you — in case of default, and it adds to your monthly payment. Once you've built enough equity (usually 20%), you can often request to have it removed.
Debt-to-Income Ratio
Your debt-to-income ratio (DTI) compares your monthly debt obligations to your gross monthly income. Lenders use it to gauge whether you can comfortably add a mortgage payment on top of what you already owe. Student loans, car payments, credit card minimums — these all count. A lower DTI gives you more room to work with.
Income Stability
Lenders want to see that your income is likely to continue, not just that you earned well last year. If you're self-employed, work on commission, or have variable income, expect to provide additional documentation — often two years of tax returns — so the lender can establish a reliable income baseline.
Ready to see where you stand? Start your pre-approval and we'll walk through your numbers together.
