Conventional loans are generally made to borrowers who have a stable employment history and have good credit, minimal debt, and ample savings because of all the requirements to obtain this loan type. Some are first-time homebuyers, but most have owned a home before and have built up a solid credit history through consistent mortgage payments and have a sizable down payment from the equity they got from selling their previous home.

Here are some of the qualifications for getting a conventional loan:

• Proof of a steady income
• Credit score of 620 or higher
• DTI of less than 45%
• At least a 3% conventional loan down payment
• Private mortgage insurance required with a down payment of less than 20%

Larger down payments are likely required for borrowers with lower credit scores and/or debt-to-income (DTI) ratios that are on the higher end. Putting down 20% will eliminate the private mortgage insurance requirement. Keep in mind that with a conventional mortgage, there are limits on how much you can borrow. Those limits vary by region and change annually. In 2021, the conventional loan limit is $548,250 with an expanded high balance option up to $822,375.