June 8, 2016 in Mortgages

Find out: What is a conventional mortgage?

Conventional loans

Who they’re for: Conventional mortgages are ideal for borrowers with good or excellent credit.

RATE SEARCH: Find the best mortgage deals in your area.

How they work: Conventional mortgages are “plain vanilla” home loans. They follow fairly conservative guidelines for:

Debt-to-income ratio

Percentage of monthly income that is spent on debt payments, including mortgages, student loans, auto loans, minimum credit card payments and child support.

Cost: Closing costs, down payments, mortgage insurance and points can mean the borrower has to show up at closing with a sizable sum of money out of pocket.

Find out more about closing costs and how to save money.

What’s good: Conventional mortgages generally pose fewer hurdles than Federal Housing Administration or Veterans Affairs mortgages, which may take longer to process.

What’s not as good: You’ll need excellent credit to qualify for the best interest rates.