Conventional loans: low rates & fast closings

Conventional loans work best for:

• Buyers with 620+ credit scores (700+ for best rates)
• Those with 3–20% down payment saved
• Anyone buying primary homes, vacation homes, or investment properties
• Borrowers who want to remove mortgage insurance after reaching 20% equity
• Buyers who need to close fast (12–21 days vs. 30–45 days)

Consider other loan types if you:

• Have credit below 620 → FHA loan (accepts 580+)
• Are a veteran or active military → VA loan (0% down)
• Need to borrow above $832,750 → Jumbo loan
• Are buying in a rural area → USDA loan (0% down)

Not sure which loan type fits your situation? Use our calculator above or talk to a Tomo Mortgage loan advisor—we'll help you compare all your options.

You need a minimum credit score of 620 to qualify for a conventional loan. However, your credit score significantly impacts your interest rate:

• 620–699: You qualify, but expect moderate rates
• 700–759: You'll get good rates (typically 0.25–0.5% better)
• 760+: You'll get the best rates available

If your score is below 620, consider an FHA loan which accepts scores as low as 580. With Tomo Mortgage, we'll help you compare conventional vs. FHA options to find the best rate for your situation.

The minimum down payment for a conventional loan is 3% for first-time homebuyers and 5% for repeat buyers. However, your down payment size affects your costs:

• 3–19% down: You'll pay PMI (typically $100–300/month)
• 20%+ down: No PMI required, saving you hundreds monthly

Example: On a $400,000 home, you'd need $12,000–20,000 minimum (3–5%). While 20% down ($80,000) eliminates PMI, most buyers put down 7–10% and remove PMI later as their home appreciates.

All conforming loans are conventional loans, but not all conventional loans are conforming.

Conventional Loan: Any mortgage not backed by the government (unlike FHA, VA, or USDA loans). A conforming loan is a conventional loan that meets Fannie Mae and Freddie Mac standards, including loan limits of $766,550 in most areas for 2025.

Why does this matter? Conforming loans typically offer better rates because lenders can sell them to Fannie Mae or Freddie Mac. Loans above conforming limits are called jumbo loans and require higher credit scores and down payments.

Bottom line: With Tomo Mortgage, we specialize in conforming conventional loans with $0 lender fees and can close in as little as 12 days.

Yes, this is one of the biggest advantages of conventional loans over FHA loans. You can remove PMI in three ways:

• Request removal once you reach 20% equity (through payments or appreciation)
• Automatic removal at 22% equity (required by federal law)
• Refinance to remove PMI if your home value increases significantly

Most homeowners remove PMI within 5–7 years through home appreciation alone. Once removed, you'll save $100–300/month for the remaining life of your loan.

With FHA loans, mortgage insurance is permanent—you'd need to refinance to remove it, which costs thousands in closing costs.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Nebraska, New Jersey, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, and Wyoming.

With Tomo Mortgage, you can close a conventional loan in as little as 12 days. Our average closing time is 21 days—compared to 30–45 days with traditional lenders.

Why we're faster:

• Fewer property requirements than FHA/VA loans
• Digital documentation
• 7-day/week support to keep things moving
• Automated underwriting that flags issues early

For 2025, the conforming loan limit is $766,550 in most U.S. counties. High-cost areas like parts of California, New York, and Hawaii have higher limits up to $1,149,825.

Loans within these limits are called "conforming loans" and typically offer the best rates. If you need to borrow more, you'll need a jumbo loan, which requires:

• Higher credit scores (typically 700+)
• Larger down payments (10–20%)
• More documentation

Not sure what your county's limit is? Check with a Tomo Mortgage loan advisor—we'll tell you your specific limit and help you explore options if you're above it.