Definition
A home loan that is not insured or guaranteed by a government agency (unlike FHA, VA, or USDA loans). Conventional mortgages are originated and serviced by private lenders and conform to guidelines set by Fannie Mae and Freddie Mac. They typically require higher credit scores (620+) and down payments (3-20%) than government loans but offer more flexibility in loan amounts, property types, and no upfront mortgage insurance premiums.
Related Mortgage Terms
- Conforming Loan
A mortgage that meets the guidelines set by Fannie Mae and Freddie Mac, includin...
- Fannie Mae
The Federal National Mortgage Association (Fannie Mae) is a government-sponsored...
- Private Mortgage Insurance (PMI)
Insurance required by conventional lenders when the down payment is less than 20...
- Amortization
The process of paying off a mortgage through regular monthly payments of princip...
- Annual Percentage Rate (APR)
The total annual cost of a mortgage expressed as a percentage, including the int...
Understanding mortgage terminology helps you compare loan offers and make informed decisions. Use our mortgage calculator to see how these terms affect your monthly payment.