A conventional loan is a mortgage that is not backed by the government, and it is the most widely used loan type in the country. Solid credit and steady income can unlock competitive rates and a down payment as low as 3%.
Mountain Country Mortgage compares conventional lenders on your behalf, so buyers throughout Northern Arizona get a competitive rate without settling for one bank’s terms.
A conventional loan is a mortgage that carries no government backing. Instead, it follows guidelines set by Fannie Mae and Freddie Mac, and private lenders fund it directly.
Because there is no government insurance behind the loan, conventional financing typically asks for stronger credit and a somewhat larger down payment than FHA. In exchange, you get competitive rates, flexible loan amounts, and fewer restrictions on the type of property you can buy.
Conventional loans work for primary residences, second homes, and investment properties, and you can use one to purchase or refinance. Mountain Country Mortgage is a broker, not a lender, so we compare conventional lenders on your behalf instead of pointing you toward a single rate sheet.
Buyers with strong credit and a healthy down payment often come out ahead with a conventional loan, especially once mortgage insurance is factored in. Since you can get PMI canceled well before the loan matures instead of paying it for the life of the loan, the monthly savings can add up fast in a region where home prices already run above the national median.
Conventional financing also works well for repeat buyers moving up within the region, since equity from a current home can cover a competitive down payment and skip mortgage insurance altogether. It is also one of the few loan types that supports second homes and investment properties, both common purchase goals across Northern Arizona’s resort and rental markets.
A move-up buyer selling a starter home in Flagstaff rolled their equity into a 20% down payment on a larger property. Going conventional let them skip mortgage insurance entirely and lock in a lower payment than their previous FHA loan carried.
| Requirement | Typical Guideline |
|---|---|
| Minimum Credit Score | 620 in most cases. Higher scores unlock better pricing. |
| Down Payment | As low as 3% for qualified primary-residence buyers. |
| Debt-to-Income Ratio | Typically 45% or lower. |
| Loan Limits | Set annually by the Federal Housing Finance Agency and vary by county. Look up the current conforming loan limit at the FHFA’s official conforming loan limit page. |
| Property Types | Single-family, condo, townhome, 2–4 unit properties, second homes, and investment properties. |
| Mortgage Insurance | Required if your down payment is below 20%. You can request cancellation once you reach 20% equity, and it must end automatically by 22% equity even if you never ask. |
Most lenders look for 620 or higher, though a stronger score earns a better rate.
We review your income, assets, and debts to tell you what you can borrow.
Your real estate agent submits an offer once you know your budget.
We submit your file to the lender and manage the process on your behalf.
You sign final documents and receive the keys.
A couple of quick stops before you go further, so you walk into your first conversation with a loan officer already prepared.
A plain-English walkthrough of the whole process, from checking your credit to closing day.
See every loan program Mountain Country Mortgage offers, from first-time buyer options to investor financing.
A conventional loan is not backed by the government. An FHA loan is insured by the Federal Housing Administration.
FHA allows lower credit scores and smaller down payments, but it carries mortgage insurance for most of the loan term. Conventional loans let you request cancellation at 20% equity, with automatic termination required by 22% equity, which often makes them the lower-cost option for stronger-credit buyers over time.
Yes. Conventional loans allow down payments as low as 3% for qualified buyers.
If you put down less than 20%, you will pay private mortgage insurance until you reach 20% equity and request cancellation, or until you hit 22% equity, when it must end automatically. Many buyers choose this route to get into a home sooner rather than waiting to save a full 20%.
Most conventional loans call for a minimum score around 620.
A higher score earns a better rate, and lenders may have their own overlays on top of the baseline guideline. Ask a Mountain Country Mortgage loan officer where your specific score lands.
Yes. Conventional loans allow both occupant and non-occupant co-borrowers.
An occupant co-borrower lives in the home with you. A non-occupant co-borrower, often a parent or family member, helps you qualify without living there. That flexibility can make a real difference for buyers who need extra income on the application to qualify, and it is more permissive than what many other loan programs allow.
A conventional loan stays within the conforming loan limit. A jumbo loan exceeds it.
The conforming loan limit is set annually and varies by county, so the exact cutoff changes from year to year. If you need to borrow more than the current limit for your county, you are looking at a jumbo loan instead. Check the current figure at the FHFA’s official conforming loan limit page.
Yes. Conventional financing is one of the few loan types available for non-owner-occupied properties.
Down payment requirements run higher for investment properties than for a primary residence, so talk with a loan officer about what to expect for your specific purchase.
It depends on your credit and how much you have saved.
A credit score above 660 paired with a 3% to 5% down payment often makes conventional a strong choice. If your credit is lower or you need more flexibility, FHA may fit your situation better. A loan officer can walk through both scenarios with you.
Yes. Conventional refinancing covers rate-and-term refinances and cash-out refinances.
Homeowners with an FHA loan and enough equity often refinance into conventional financing to eliminate mortgage insurance for good. Talk with a loan officer about whether your current equity supports that move.