A conventional loan is a mortgage that isn't guaranteed or insured by the government . Conventional mortgages are available through different types of mortgage lenders, including banks, credit unions and online mortgage companies . Conventional loans are available as fixed-rate, adjustable-rate, conforming, jumbo and non-qualifying mortgages.
A conventional mortgage loan is not directly insured by a government program . Most conventional loans are also “conforming” loans, which simply means that they meet the requirements for Fannie Mae or Freddie Mac. Both are government-sponsored enterprises that purchase mortgages from lenders and sell them to investors . This frees up lenders’ funds so they can get more qualified buyers into homes . Conventional mortgages are available with several different term options with most people choosing between 15-year and 30-year terms . Because there are several different sets of guidelines that fall under the umbrella of “conventional loans,” there’s no single set of requirements for borrowers . However, in general, conventional loans have stricter credit requirements than government-backed loans like Federal Housing Administration (FHA) loans
For a conventional loan, most lenders require a debt-to-income ratio of 43% or lower, with some allowing up to 45% in certain cases . The maximum debt-to-income ratio for a conventional loan through an Automated Underwriting System is 50%, while manually underwritten loans have a maximum front-end DTI of 36% and back-end of 43% .
If you enjoyed this post, please consider sharing it with others. 
items