Conventional Loans in Oak Creek, Milwaukee & Waukesha – Top Questions Answered (2025 Guide)
If you're researching conventional loans in Oak Creek, Milwaukee, or Waukesha, you're in the right place. Conventional mortgages are one of the most popular loan types for Wisconsin homebuyers thanks to their flexible terms, competitive rates, and fast approval process. Here's everything you need to know before applying.
But there's a lot of confusion out there about what a conventional loan actually is, how it works, and what it takes to qualify - so let's clear that up.
What Is a Conventional Loan?
A conventional loan is a mortgage not backed by the government (like FHA or VA loans). Instead, it follows the lending standards set by Fannie Mae and Freddie Mac - the two major government-sponsored enterprises that buy and guarantee most U.S. home loans.
Because these loans follow standard guidelines, they usually offer competitive interest rates and fewer restrictions on property types compared to government-backed programs.
For a full breakdown, check out Investopedia's guide to conventional loans for an expert overview.
What Credit Score Do You Need in Wisconsin?
In most cases, you'll need a minimum 620 credit score to qualify. That said, higher scores (700+) often result in lower rates and better pricing.
If your credit is just below that threshold, don't panic - my team and I can review your credit report, identify quick-win improvements, and get you on track for approval.
How Much Down Payment Do You Need?
You can buy with as little as 3% down using a conventional loan - yes, really.
That said, if you can put down 20%, you'll avoid Private Mortgage Insurance (PMI) altogether.
Many buyers in the Oak Creek and Waukesha markets use conventional loans because they can be structured to keep monthly payments low while still allowing flexible down payment options.
What Is PMI and When Does It Go Away?
Private Mortgage Insurance (PMI) is required when you put down less than 20%. It's not forever - you can request cancellation once your equity hits 20%, and in most cases, it automatically drops off at 78%.
For more details, Fannie Mae's official PMI removal guide outlines the steps clearly.
What's the Debt-to-Income (DTI) Requirement?
Lenders generally look for your total DTI ratio to be 43% or less, but that can stretch higher if you have strong compensating factors like great credit or a large down payment.
If you're unsure where you stand, I can run your numbers through Fannie Mae's automated system to get real-time results - no guesswork, no fluff.
What Documentation Do Lenders Require?
You'll typically need:
- Pay stubs, W-2s, or tax returns
- Bank statements showing available assets
- Photo ID
- Proof of homeowners insurance
At Union Home Mortgage, my team and I keep it simple - we only ask for what's absolutely required by Fannie Mae or Freddie Mac findings.
Fixed vs. Adjustable-Rate: Which Is Better?
Both are available on conventional loans:
- Fixed-rate: steady, predictable monthly payments.
- ARM (Adjustable-Rate): lower initial rate that adjusts later.
Most homebuyers in Milwaukee County lean toward fixed-rate for stability, especially with long-term plans in the home.
Can You Use a Conventional Loan for a Second Home or Investment Property?
Yes - but the requirements are tougher. Expect to need a larger down payment (10 - 25%), higher credit score, and stronger reserves.
If you're looking into investment properties or short-term rentals, I also offer DSCR loans that qualify based on rental income - learn more here.
Can You Refinance a Conventional Loan?
Absolutely. If rates drop or your home value increases, a rate-and-term or cash-out refinance can make sense. I recently wrote a guide breaking down your options - check out Refinance Your Mortgage in Wisconsin - 2025 Homeowner's Guide.
What Are the Typical Closing Costs?
Expect 2% - 5% of the loan amount in closing costs (underwriting, processing, appraisal, title, etc.). I'll give you a detailed Loan Estimate early on, so there are no surprises.
How Soon Can You Close?
Most conventional loans close in about 30 days, though my team regularly closes faster - especially when income is underwritten upfront.
Final Thoughts
If you're buying a home in Oak Creek, Milwaukee, or Waukesha, a conventional loan is often the best mix of flexibility, affordability, and long-term value.
Whether you're a first-time buyer, upgrading, or refinancing, I'll walk you through every step - from pre-approval to the closing table.
Ready to Get Started?
If you want a straightforward, no-nonsense mortgage experience with local expertise - let's talk.
📞 Call/Text: 414-975-2654
📧 Email: azeman@uhm.com
🌐 Website: www.mkemortgage.com
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Adam Zeman - NMLS #870441
Union Home Mortgage | Local Wisconsin Mortgage Expert