Conventional Loans
Agency financing — the standard route, and the one to rule out before considering anything else. Where your income documents cleanly and your credit is sound, conventional is almost always the cheapest way to borrow.
Available in California only. Investor and business-purpose lending nationwide. Owner-occupied home loans in California.
At a glance
- Structure
- Agency financing
- Credit floor
- 620 general
- Prepayment penalty
- None
- Lender panel
- 20+
Who this fits
Your income is steady and documents cleanly
Your credit is sound — 620 is the general floor, though it varies by program
You have a down payment saved, or a documented gift
You are self-employed and your tax returns genuinely do support the payment
You want a long fixed term with no prepayment penalty
Who this does not fit
Your write-offs suppress your qualifying income. The most common decline there is. Bank statement, profit-and-loss and DSCR exist for it.
You have a recent bankruptcy, foreclosure or short sale inside conventional waiting periods. Non-QM seasons sooner.
Your loan is above the conforming limit for the county. That is a jumbo file.
You are at the conventional financed-property limit. DSCR has no limit.
You are buying outside California.
How qualification works
The most standardized underwriting there is: verified income, a debt-to-income calculation including the new payment, a credit review, sourced and seasoned assets, and an appraisal.
Debt-to-income
Debt-to-income is what stops most conventional borrowers — more often than credit, and more often than the down payment. It is worth testing before you apply rather than after a decline.
We are a brokered business and place the file from a panel of 20+ lenders. The full detail of the document load and the process is on Full Documentation, which is the same underwriting described at length.
Work out the monthly payment
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For illustrative and educational purposes only. Results produced by this calculator perform arithmetic based solely on numbers you enter and do not reflect actual loan offers, interest rate quotes, or commitments to lend. Actual loan terms, payments, interest rates, and approval depend on complete underwriting, credit review, property valuation, and lender guidelines. Loankey.io arranges loans through third-party lenders; loans are not funded directly by Loankey.io.
Frequently Asked Questions
How is this different from FHA?
FHA is government-insured with a lower entry bar and mortgage insurance that usually stays for the life of the loan. Conventional has a higher bar and mortgage insurance that can fall away as equity builds. With sound credit and a reasonable down payment, conventional generally costs less over time.
Is there mortgage insurance?
Where the down payment is below the threshold, yes — and unlike FHA it can generally be removed once you have enough equity.
Is there a prepayment penalty?
No. You can sell or refinance whenever you like.
Can I use it for an investment property?
Yes, with a larger down payment, more reserves and tighter credit. The investor route is on Investor Financing.
Can I use gift funds?
Generally yes, with a gift letter and documentation of the source.
What if I am declined?
The useful part is knowing exactly which guideline you missed, because that determines what works instead. A conventional decline is a starting point, not an ending.
What happens next
The same underwriting, described in full.
You are here
Conventional Loans
Agency financing — the standard route.
If the loan exceeds the conforming limit for the county.
Request a Scenario Analysis
Tell us how your income is earned and what you have saved. If conventional is the cheapest route for you, that is what we will say.
Nothing on this page or website constitutes an offer of credit, a rate quote, or a commitment to lend. All loans are arranged through third-party lenders and are subject to full application, credit approval, income/asset verification, property appraisal, and underwriting. Terms and availability are subject to change without notice. Loankey.io is a licensed real estate broker; loans are arranged, not made. Investor and business-purpose lending nationwide. Owner-occupied home loans in California.