What do you need to qualify for a conventional loan?
Qualifying for a Conventional Loan
Conventional loan qualifications are often more stringent than other loan types. Here’s what most lenders will expect from a borrower looking to obtain a conventional, non-conforming loan:
A credit score of at least 620
A debt-to-income ratio below 50%
Using the loan for your primary residence
Borrowing an amount within the “conforming” limit. In most of the US, this is $453,100. In higher-cost areas, this can be $600,000 or more.
Here are some additional requirements that tend to vary from lender to lender:
Down payment amount. Most lenders prefer you have a down payment of 20%, but this can be hard to put together -- especially for first-time home buyers. There are other loan programs (the Conventional 97 loan and the FHA loan, for example) that require 3.5% or less down.
Employment history. Lenders are more likely to approve you for a home loan if you can demonstrate a consistent work history and reliable income source. Typically, two years of work at the same employer will be enough to suffice.