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🏦 Conventional Mortgages
Traditional home financing with flexible terms, competitive rates, and the ability to remove mortgage insurance. Perfect for buyers with good credit, stable income, and various down payment options from 3% to 20%.
Quick Answer
Conventional mortgages offer 3-20% down payments for Wisconsin homebuyers with 620+ credit scores. These traditional loans provide flexible terms, removable PMI, higher loan limits, and competitive rates for qualified borrowers with stable income.
Understanding Conventional Mortgages
For voice assistants: Conventional mortgages are traditional home loans not backed by government agencies. They offer 3-20% down payments, credit scores 620+, loan limits up to $766,550 in Wisconsin, removable PMI at 20% equity, and flexible terms for qualified borrowers in Madison, Milwaukee, and statewide.
What Makes Conventional Loans Different
Conventional mortgages are traditional loans not insured by government agencies like FHA, VA, or USDA. This means they follow guidelines set by Fannie Mae and Freddie Mac, offering more flexibility in terms and the ability to remove mortgage insurance once you reach 20% equity.
Standard Conventional
Purpose: Traditional financing within government-sponsored enterprise limits.
What You Get:
- Loan amounts up to $766,550 (2025)
- Competitive interest rates
- Flexible down payment options
- Removable mortgage insurance
- Various term lengths (15, 20, 30 years)
Jumbo Loans
Purpose: Financing for homes above conventional loan limits.
Key Features:
- Loan amounts above $766,550
- Higher down payment requirements
- Stricter credit and income requirements
- Competitive rates for qualified buyers
- No mortgage insurance required
Conventional Loan Types & Options
Loan Types Summary: Conventional loans offer fixed-rate mortgages (15, 20, 30 years) and adjustable-rate mortgages (ARM). Down payment options range from 3% for first-time buyers to 20% to avoid PMI. Choose from conforming loans up to $766,550 or jumbo loans for higher amounts.
30-Year Fixed
Most Popular Option: Predictable payments for the life of the loan
Best For: Long-term homeownership, stable budgeting
Example: $300,000 Home
20% Down ($60,000):
Loan Amount: $240,000
Monthly Payment: ~$1,400 (no PMI)
Rate varies based on credit and market
15-Year Fixed
Faster Payoff: Lower interest rates, higher monthly payments
Best For: Higher income, wanting to build equity faster
Example: $300,000 Home
20% Down ($60,000):
Loan Amount: $240,000
Monthly Payment: ~$2,100 (no PMI)
Saves ~$150,000+ in total interest
5/1 ARM
Lower Initial Rate: Fixed for 5 years, then adjusts annually
Best For: Planning to move/refinance within 5-7 years
Example: $300,000 Home
20% Down ($60,000):
Loan Amount: $240,000
Monthly Payment: ~$1,250 (initial 5 years)
Rate typically 0.5-1% lower initially
Private Mortgage Insurance (PMI) with Conventional Loans
When PMI is Required: Down payments less than 20%
PMI Cost: Typically 0.3% - 1.5% of loan amount annually
PMI Removal: Automatically at 78% loan-to-value, or request removal at 80%
PMI Payment Options:
• Monthly payments (most common)
• Single upfront payment
• Combination of upfront and monthly
• Lender-paid (higher interest rate)
Who Can Qualify for Conventional Loans?
Conventional Eligibility: To qualify for conventional mortgages in Wisconsin 2025, you need a credit score of 620+, stable employment for 2+ years, debt-to-income ratio under 43-50%, down payment 3-20%, and adequate cash reserves. Primary or secondary residence allowed.
Basic Requirements
- Credit score 620+ (higher scores get better rates)
- Steady employment history (2+ years preferred)
- Debt-to-income ratio under 43-50%
- Down payment 3-20% (varies by program)
- Cash reserves for closing costs
- Adequate income to support payments
Property & Usage
- Primary residence, secondary home, or investment
- Single-family homes, condos, townhomes
- Multi-unit properties (2-4 units) allowed
- Must meet appraisal standards
- Within conventional loan limits
- Standard property conditions required
Credit Score Impact on Rates
Credit Score 760+
Best Rates Available: Excellent credit gets you the lowest interest rates and best terms. Lenders compete for your business at this level.
Credit Score 700-759
Very Good Rates: Still excellent rates with perhaps 0.125-0.25% higher than top tier. Most conventional loan benefits available.
Credit Score 640-699
Good Rates: Slightly higher rates but still competitive. May require higher down payment or additional documentation.
Credit Score 620-639
Higher Rates: Still available but with higher interest rates and stricter requirements. Consider improving credit before applying.