Question 1

What is a conventional loan?

Accepted Answer

A conventional loan is a mortgage not backed by a government agency (unlike FHA, VA, or USDA loans). Instead, they follow guidelines set by Fannie Mae and Freddie Mac. They offer competitive rates, flexible terms from 10-30 years, and can be used for primary residences, second homes, and investment properties.

Question 2

How much down payment do I need for a conventional loan in Colorado?

Accepted Answer

While 20% down eliminates private mortgage insurance (PMI), conventional loans are available with as little as 3% down through programs like HomeReady and Home Possible. First-time buyers and those with moderate incomes may qualify for these low-down-payment options.

Question 3

What credit score do I need for a conventional loan?

Accepted Answer

Most conventional loans require a minimum credit score of 620, though 740+ will get you the best interest rates. Scores between 620-739 can still qualify but may have slightly higher rates or require a larger down payment. The better your score, the more favorable your terms.

Question 4

What are the conforming loan limits in Colorado for 2024?

Accepted Answer

The conforming loan limit in Colorado is $1,250,000 for a single-family home. Loans exceeding this limit require jumbo financing with different qualification criteria.

Question 5

When can I remove PMI on a conventional loan?

Accepted Answer

PMI can be removed once your loan-to-value ratio reaches 80% (meaning you have 20% equity). You can request cancellation at 80% LTV based on the original value, and it's automatically removed at 78%. Home appreciation may also help you reach this threshold sooner through a new appraisal.

Question 6

Should I choose a conventional loan over FHA?

Accepted Answer

Conventional loans are often better if you have a 620+ credit score and can put at least 5% down, since PMI is removable (unlike FHA mortgage insurance). They also offer more property type flexibility. FHA may be better for lower credit scores or smaller down payments. We'll compare both options for your situation.

Conventional Loans Colorado — Conforming Mortgage Options

Conventional Loan Advantages

Removable PMI

Competitive Rates

Property Flexibility

As Low as 3% Down

Conventional Loan Requirements

Loan Term Options

30-Year Fixed

15-Year Fixed

20-Year Fixed

10-Year Fixed

ARM Options

Conventional Loan FAQ

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Colorado Locations

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