Is a Conventional Loan Right for You? Here’s What Wisconsin Homebuyers Should Know
If you're shopping for a home in Wisconsin, chances are you've come across the term "conventional mortgage." But what does it really mean - and is it the right loan for you?
As a mortgage loan officer serving the greater Waukesha area and Southeast Wisconsin, I help clients compare all their options, from FHA to VA to conventional loans. Here's what you need to know about conventional financing - and how to decide if it fits your goals.
What Is a Conventional Loan?
A conventional loan is a mortgage that's not backed by the government. Instead, it's offered through private lenders and typically follows guidelines from Fannie Mae or Freddie Mac.
These loans are popular for a reason - they offer great flexibility and potential long-term savings for qualified buyers.
Learn more from Fannie Mae's conventional loan resource page.
Benefits of Choosing a Conventional Mortgage
- Low Down Payment Options: As little as 3% down for qualified buyers (especially first-time buyers).
- No Upfront Mortgage Insurance Premium: Unlike FHA loans, there’s no mandatory upfront fee.
- PMI Can Be Removed: Private Mortgage Insurance (PMI) can be cancelled once you hit 20% equity.
- More Property Types Allowed: Conventional loans can sometimes work better for condos, second homes, or investment properties.
Want to see how it compares to FHA? The Consumer Financial Protection Bureau has a helpful breakdown.
Who Qualifies for a Conventional Loan?
Conventional loans typically require:
- A credit score of 620 or higher (680+ often gets better terms)
- Stable income and employment
- Lower debt-to-income ratio (usually under 45%)
- Documented assets for down payment and closing costs
I work with buyers every week who are surprised to learn they qualify for a conventional mortgage - even with minimal down.
Conventional Loans vs. FHA: Which One Is Better?
It depends on your financial profile. Here's a quick comparison:
| Feature | Conventional Loan | FHA Loan |
|---|---|---|
| Down Payment | As low as 3% | 3.5% minimum |
| Mortgage Insurance | PMI (can be removed) | MIP (often lasts for life) |
| Credit Flexibility | 620+ credit score | More lenient on credit |
| Long-Term Cost | Lower with strong credit | Higher total cost |
Need help comparing side by side? Let's review your numbers and goals.
Local Buyers Are Choosing Conventional
Buyers in Brookfield, Waukesha, and Oconomowoc are leaning into conventional loans in 2025. Why? Many have solid credit and want to avoid long-term mortgage insurance. I can show you what's best based on your personal profile - not just a generic online quote.
Explore Union's mortgage options here for more info.
Let's See If You Qualify
If you're ready to explore your home loan options - or just want to compare conventional and FHA side-by-side - I'm here to help.
Schedule your free consult: https://calendly.com/adam-zeman/30min
Or call me directly: 414-975-2654
Or email: azeman@uhm.com
Want instant mortgage answers, 24/7? Use my mortgage assistant-
https://bit.ly/Real-estate-mortgage-gpt
Let's make home happen - with clarity and confidence.