Conventional Mortgage

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Home Real Estate Terms Glossary Conventional Mortgage

What is a Conventional Mortgage?

A conventional mortgage, also known as a conventional loan, is a loan that is not backed or secured by a government agency, like the Department of Veterans Affair. We can divide conventional mortgages into "conforming" and "non-conforming" loans.

Private lenders, such as banks, and credit unions, issue these loans. In most cases, lenders that provide conventional loans service these loans. This means that they collect mortgage payments. As lenders usually consider conventional mortgages riskier, conventional mortgages or loans tend to have more stringent requirements.

Because conventional mortgages are customized to meet the needs and preferences of traditional homebuyers, they are ideal for people with strong financial means and high credit scores.

Examples of Conventional Mortgage

  • Example 1: Conforming conventional loans
  • Example 2: Portfolio loans

Here’s Investopedia’s definition of a conventional mortgage . You can also read further about what’s included in a mortgage note here.

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