---
title: "Conventional Loans | PierPoint Mortgage"
description: "Conventional loans for primary homes, second homes & investors. Down payments from 3%; PMI removable at 20% equity. Shop 100+ lenders. Call: (231) 737-9911"
author: "PierPoint Mortgage"
date: "2026-03-29"
tags: ["conventional loans"]
canonical: "https://pierpointmortgage.com/conventional-loans/"
last_updated: "2026-06-10"
---

# Conventional Loans | PierPoint Mortgage

**By PierPoint Mortgage** | March 29, 2026

Conventional loans for primary homes, second homes & investors. Down payments from 3%; PMI removable at 20% equity. Shop 100+ lenders. Call: (231) 737-9911

---

> **Quick answer:** Conventional loans through [PierPoint Mortgage](https://pierpointmortgage.com/) provide fixed-rate and adjustable-rate home financing backed by Fannie Mae and Freddie Mac guidelines. With down payments starting at 3% and the ability to cancel private mortgage insurance at 20% equity, conventional mortgages remain the most widely used loan option for primary residences, second homes, and investment properties across all 15 states we serve. Call [(231) 737-9911](tel:+12317379911) to get pre-approved.

[Start Your Application](https://shannonswartz.zipforhome.com/LoanApplication/Contact?Language=E&IsStart=Y)

Overview

## What Is a Conventional Loan?

Conventional mortgages come in two primary structures. Fixed-rate loans lock your interest rate for the entire repayment term, giving you predictable monthly payments over 15, 20, or 30 years. Adjustable-rate mortgages (ARMs) offer a lower introductory rate for a set period, typically 5 or 7 years, before adjusting annually based on a market index.

Because no government backing exists, lenders carry more risk on conventional loans. As a result, qualification standards are somewhat stricter than government-backed programs. However, borrowers who meet these standards benefit from lower total loan costs, no upfront mortgage insurance premiums, and the ability to cancel PMI once they reach 20% equity.

Eligibility

## Requirements and Qualification

### Credit Score

A minimum FICO score of 620 is required for most conventional programs. Borrowers above 740 typically receive the best available interest rates and lowest PMI premiums.

### Down Payment

Minimum 3% for first-time buyers through Fannie Mae HomeReady or Freddie Mac Home Possible programs. A 20% down payment eliminates the need for private mortgage insurance entirely.

### Debt-to-Income Ratio

Lenders generally cap DTI at 45%, though some allow up to 50% with strong compensating factors such as high reserves or excellent credit.

### Income Documentation

Two years of W-2s or tax returns, recent pay stubs covering 30 days, and employment verification are standard. Self-employed borrowers need two years of filed tax returns plus a year-to-date profit and loss statement.

### Property Appraisal

An independent licensed appraiser must confirm the property value meets or exceeds the loan amount. The home must meet minimum habitability and safety standards.

### Cash Reserves

Depending on the loan amount and property type, lenders may require liquid assets equal to two to six months of mortgage payments after closing.

Process

## How Conventional Loans Work

1

### Get Pre-Approved

Submit income documentation, authorize a credit pull, and receive a pre-approval letter that shows sellers you are a qualified buyer with verified financing capacity.

2

### Select Your Loan Program

Choose between fixed-rate stability or adjustable-rate savings. Your PierPoint loan officer will compare rate sheets and help you select the term that matches your financial goals.

3

### Submit the Full Application

Complete the Uniform Residential Loan Application (Form 1003) along with all supporting documents including bank statements, tax returns, and identification.

4

### Underwriting and Appraisal

The lender’s underwriting team reviews every detail of your application while an independent appraiser confirms the property’s market value.

5

### Conditional Approval

If the underwriter needs additional documentation, such as an updated bank statement or a letter of explanation, you will receive a conditions list to satisfy.

6

### Clear to Close

Once all conditions are met, your loan receives final approval. Review the closing disclosure, sign the documents at the title company, fund the loan, and receive your keys.

Advantages

## Benefits of Conventional Loans

### No Upfront Mortgage Insurance

Unlike [FHA loans](https://pierpointmortgage.com/fha-loans/) that charge a 1.75% upfront MIP at closing, conventional loans have no equivalent upfront insurance fee, reducing your cash needed at the closing table.

### PMI Cancellation

Private mortgage insurance is automatically removed when your loan balance reaches 78% of the original appraised value, or you can request removal at 80% through a new appraisal.

### Flexible Property Types

Conventional financing works for primary residences, second homes, vacation properties, and investment properties up to four units, all under one loan program.

### Competitive Interest Rates

Borrowers with [credit scores](https://pierpointmortgage.com/credit-info/) above 720 and down payments of 20% or more consistently receive the lowest available mortgage rates in the market.

### Higher Loan Limits

For 2024, conforming loan limits reach $766,550 in most areas and up to $1,149,825 in designated high-cost counties, covering the majority of home purchases.

Ideal Borrower

## Who Should Consider a Conventional Loan?

Conventional mortgages are designed for borrowers who have established credit histories, stable employment, and enough savings for at least a modest down payment. If your credit score is 620 or higher and you can document consistent income, this loan type should be at the top of your list.

[First-time homebuyers](https://pierpointmortgage.com/first-time-homebuyer/) benefit from low-down-payment conventional options like Fannie Mae HomeReady, which requires just 3% down and allows income from non-occupant co-borrowers. Move-up buyers and those purchasing second homes or investment properties also find conventional loans advantageous because government-backed programs like FHA and VA restrict these property types.

If you plan to stay in your home long-term and want predictable monthly payments, a 30-year fixed conventional loan offers the stability of a locked rate for three decades. If you expect to sell or [refinance](https://pierpointmortgage.com/mortgage-refinancing/) within 5 to 7 years, an ARM can save thousands in interest during the initial fixed period.

Comparison

## How Does This Compare?

| Feature | Conventional | FHA | VA |
| --- | --- | --- | --- |
| Minimum Credit Score | 620 | 580 | No official minimum |
| Down Payment | 3% – 20% | 3.5% | 0% |
| Mortgage Insurance | PMI (removable at 20%) | MIP (life of loan) | None (funding fee instead) |
| Loan Limits (2024) | $766,550+ | $498,257+ | No limit |
| Property Types | Primary, 2nd home, investment | Primary only | Primary only |
| Upfront Fees | None | 1.75% MIP | VA funding fee 1.25-3.3% |

FAQ

## Frequently Asked Questions

 What credit score do I need for a conventional loan?

Most conventional lenders require a minimum FICO score of 620. However, to qualify for the best interest rates and lowest PMI premiums, a score of 740 or above is recommended. Your PierPoint loan officer can review your credit profile and identify steps to improve your score before you apply.

 How much down payment is required?

The minimum down payment is 3% for qualified first-time buyers through programs like Fannie Mae HomeReady. For repeat buyers, most lenders require at least 5%. Putting 20% down eliminates private mortgage insurance and often secures the lowest available rate.

 Can I use a conventional loan for an investment property?

Yes. Conventional mortgages are one of the few loan types that finance investment properties with up to four units. Expect to put at least 15% down for a single-unit investment and 25% for two to four units, with slightly higher interest rates than primary residence financing.

 When can I remove PMI on a conventional loan?

You can request PMI cancellation once your loan balance reaches 80% of the original appraised value, provided you have a good payment history. PMI is automatically terminated when the balance drops to 78% of the original value.

 What is the difference between conforming and non-conforming conventional loans?

Conforming loans fall within Fannie Mae and Freddie Mac loan limits and meet their underwriting guidelines. Non-conforming loans, including jumbo mortgages, exceed those limits or have other characteristics that prevent them from being sold to the agencies.

Related Products

## Explore More Loan Options

[FHA Loans](https://pierpointmortgage.com/fha-loans/)[VA Loans](https://pierpointmortgage.com/va-loans/)[Jumbo Loans](https://pierpointmortgage.com/jumbo-loans/)[Mortgage Refinancing](https://pierpointmortgage.com/mortgage-refinancing/)[USDA Loans](https://pierpointmortgage.com/usda-loans/)

## Available Across 15 States

[Alabama](https://pierpointmortgage.com/mortgage-broker/mortgage-broker-alabama/)[California](https://pierpointmortgage.com/mortgage-broker/mortgage-broker-california/)[Colorado](https://pierpointmortgage.com/mortgage-broker/mortgage-broker-colorado/)[Connecticut](https://pierpointmortgage.com/mortgage-broker/mortgage-broker-connecticut/)[Florida](https://pierpointmortgage.com/mortgage-broker/mortgage-broker-florida/)[Georgia](https://pierpointmortgage.com/mortgage-broker/mortgage-broker-georgia/)[Louisiana](https://pierpointmortgage.com/mortgage-broker/mortgage-broker-louisiana/)[Maine](https://pierpointmortgage.com/mortgage-broker/mortgage-broker-maine/)[Michigan](https://pierpointmortgage.com/mortgage-broker/mortgage-broker-michigan/)[North Carolina](https://pierpointmortgage.com/mortgage-broker/mortgage-broker-north-carolina/)[Oklahoma](https://pierpointmortgage.com/mortgage-broker/mortgage-broker-oklahoma/)[Oregon](https://pierpointmortgage.com/mortgage-broker/mortgage-broker-oregon/)[Pennsylvania](https://pierpointmortgage.com/mortgage-broker/mortgage-broker-pennsylvania/)[Virginia](https://pierpointmortgage.com/mortgage-broker/mortgage-broker-virginia/)[Washington](https://pierpointmortgage.com/mortgage-broker/mortgage-broker-washington/)

[View All Service Areas →](https://pierpointmortgage.com/service-areas/)

## Ready to Get Started?

Speak with an experienced PierPoint Mortgage loan officer today. We will help you find the right loan for your goals and guide you through every step of the process. Call [(231) 737-9911](tel:+12317379911) for a free consultation.

[SEE YOUR RATE NOW](https://shannonswartz.zipforhome.com/LoanApplication/Contact?Language=E&IsStart=Y)[CALL (231) 737-9911](tel:+12317379911)

NMLS #112844 · Equal Housing Opportunity · No credit pull required to start

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**Shopping a mortgage in one of our 15 states?**

PierPoint Mortgage is an independent brokerage, NMLS #112844, licensed since 2003. We compare wholesale rate sheets from 100+ lenders instead of selling one bank's products, and give you a written quote before you commit to anything.

- Free rate comparison: (231) 737-9911
- Apply: https://pierpointmortgage.com/apply/

- Full page: https://pierpointmortgage.com/conventional-loans/