Conventional
Home Loans

You’ll need to have a generally strong financial profile that demonstrates your capability to make the payments on time every month.

To enjoy the low-cost benefits of this type of mortgage, here are a few of the requirements:

• Good to excellent credit: Although the exact FICO requirement can vary per lender, a credit score of 620 and above is usually acceptable.
• Consistent income: You will need to show you have the steady income to cover the cost of your loan. Self-employed individuals will need to supply two years of tax returns.
• Minimum 3% down/loan-to-value (LTV) of 97% or lower: You will need to have at least 3% of the home value saved up for a down payment when you buy a home. To avoid mortgage insurance, put at least 20% down.
• Standard DTI of 43%: While the ideal DTI for a conventional loan is 43% and lower, there are some special cases in which it can go all the way up to 50%. The DTI is the percentage of your monthly gross income that goes to paying recurring monthly debts, including your new proposed mortgage payment.
• Strong cash reserves: Depending on your DTI, credit score, LTV, occupancy status, property type and how many properties you are currently financing, you may be required to have six months or more of cash reserves after closing to cover your loan costs.

As a top mortgage lender in the U.S., Pennymac can offer some of the most competitive rates and personalized service on the market. Whether you are a homebuyer interested in low down payment options or a current homeowner looking to refinance for more favorable terms on your mortgage, our Loan Experts are equipped to help you through each and every step of the conventional mortgage journey. We are also committed to providing you with lifelong service on your loan, as in most cases we remain as your servicer after the loan closes, unlike many other lenders.

When most people think of mortgages, they’re likely thinking about 30-year fixed-rate loans. There are many reasons to choose this type of loan but the most popular is often the security of knowing what you’ll be paying over the life of your loan. While rent on a property can go up sometimes every year, when you have a fixed-rate mortgage, you can rely on the same payment for 30 years, regardless of any changes in the economy. While some people who know they will only be in the home for a very short amount of time could benefit from the lower introductory rate offered in an ARM, the majority of folks tend to prefer the stability of a fixed-rate loan.

Tip: Use our home loan calculator to estimate your conventional loan rate and monthly payment to get a clearer picture of your potential scenario.

Conventional mortgages are relatively versatile loan products that can be used for a wide range of properties, including vacation or investment homes. Some of these property types include:

• Single-family homes (attached or detached)
• Planned unit developments (attached/detached homes within a homeowner’s association)
• 2-unit, 3-unit and 4-unit properties
• Condominiums