Conventional Loan FAQ for California

A mortgage that isn't insured or guaranteed by the federal government. Most conventional loans are also "conforming" — they meet Fannie Mae and Freddie Mac standards and stay within your county's loan limit. It's the most common mortgage type in the U.S.

"Conventional" means not government-backed. "Conforming" means it meets Fannie/Freddie rules and stays within the county limit. Most conventional loans are conforming — but a conventional loan above the limit is a jumbo (non-conforming) loan.

Yes. The majority of U.S. mortgages are conventional. They offer flexible terms, cancelable mortgage insurance, and financing for a wide range of properties and occupancy types.

Banks, credit unions, mortgage lenders, and brokers. As a broker, Save Financial shops your single application across many lenders to find the best fit and rate — rather than offering just one institution's products.

About 620 is the practical floor. As of late 2025, Fannie Mae's automated underwriting no longer uses a hard cutoff, weighing your full profile — but credit strongly drives pricing, so 700–720+ gets the best rates. Lenders use the middle of your three bureau scores.

Back-end debt-to-income is usually ≤43–45%, and up to ~49–50% with strong compensating factors. Front-end (housing only) is generally 28–36%. See Requirements for the details.

Yes, typically with two years of tax returns. If write-offs shrink your qualifying income, bank statement or 1099 loans may qualify you on real cash flow.

Yes, after a waiting period: ~4 years after Chapter 7, 2 after Chapter 13 discharge, 4 after short sale/deed-in-lieu, and 7 after foreclosure — with re-established credit. FHA waits are shorter if you need to buy sooner.

Yes — including a non-occupant co-borrower, such as a parent who lives elsewhere, to help you qualify. Their income and credit are considered alongside yours.

Permanent residents and many visa holders with valid work authorization are eligible. Foreign nationals without U.S. status generally use a foreign national loan instead.

As little as 3% for eligible first-time buyers (HomeReady/Home Possible) and 5% for repeat buyers. 20% avoids PMI. The more you put down, the lower your rate and PMI.

No — that's the most common homebuying myth. 20% simply removes PMI. Many California buyers put 5–10% down and cancel PMI later once they reach 20% equity.

Yes. A gift from family or an eligible nonprofit can cover your full down payment and closing costs, documented with a gift letter confirming it isn't a loan.

Roughly 0.3%–1.5% of the loan per year, priced by your credit score and loan-to-value. It's added to your monthly payment (or can be lender-paid or a single upfront premium).

Yes. Request cancellation at ~20% equity with a good payment history; it's automatically removed at 22% under federal law. Rising California values can get you there sooner.

For most good-credit buyers, yes — conventional PMI cancels, while FHA's mortgage insurance usually lasts the life of the loan. That difference can be worth tens of thousands over time. See Pros & Cons.

$832,750 in most counties and $1,249,125 in high-cost areas (LA, Orange, Bay Area). Above that requires a jumbo loan.

Yes — conventional has no occupancy restriction (primary, second home, or investment), up to 10 financed properties. Non-owner-occupied needs 15–25% down. This flexibility is a key edge over FHA/VA/USDA.

1–4 unit homes, warrantable condos, PUDs, co-ops, and permanent-foundation manufactured homes. Non-warrantable condos and unusual properties may need a portfolio or non-QM loan.

Yes, if the project is "warrantable" — meaning it meets rules like completed common areas and enough owner-occupancy (often ≥51%). We can check whether a specific project qualifies.

Usually, but conventional loans uniquely allow an appraisal waiver ("value acceptance") in some cases, which saves time and money. Whether you qualify depends on the property and loan file.

Typically 30–45 days from application, sometimes faster with complete documents or an appraisal waiver. Getting pre-approved first can shave a week or more.

California 30-year conventional rates have run in roughly the mid-6% range in 2026, with 15-year lower. Your rate depends on credit, LTV, and the market — see today's rates.

Photo ID, ~30 days of pay stubs, 2 years of W-2s, 2 years of tax returns (especially if self-employed), and 2–3 months of bank statements. See the Pre-Approval Guide.

Yes — into a lower rate or different term with a rate-and-term refinance, or to pull equity with a cash-out refinance. Refinancing is also how you'd drop FHA insurance by moving to conventional.

Often little or none for a primary residence, but 2–6 months may be required for investment properties, higher DTIs, or jumbo loans. Reserves also help as a compensating factor.