Ozean Realty

Conventional Loans

Conventional Loans

Conventional loans are a great option for borrowers with good credit and stable income. While they have stricter requirements, they can be an excellent choice if you qualify.

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What is a Conventional Loan?

Conventional loans are not government-backed, so they have stricter requirements and are best for borrowers with good credit. Loan limits vary by location. In 2025, Loan limit is $806,500 an increase of $39,950 (or 5.2 percent) from 2024 – in Los Angeles and offer either fixed rates, which stay the same, or adjustable rates, which start low and adjust over time.

Conventional mortgages have a fixed rate of interest, which means that the INTEREST RATE  DOES NOT CHANGE throughout the life of the loan. This gives homebuyers in California a sense of STABILITY. 

Requirements

Borrowers need good credit (FICO 720+) to secure lowest interest rates. Conventional mortgage is not guaranteed or insured by the federal government. Instead, they are available through private lenders, such as banks, credit union and wholesale mortgage companies. 

Documentation Needed: 

  1. Provide – 2 Years of W2.
  2. Provide – 2 Years of Personal Tax Returns
  3. Provide – 2 Months of bank statements
  4. Provide – 2 Weeks of Paystubs
  5. A valid DMV license/State ID card
  6. A valid social security number

Additional Requirements: 

  1. FICO score at least 620+, (FICO 740+ may get you the lowest interest rate).
  2. First Time Homebuyers in Southern California – Down Payment can be 10%, 15% of the loan amount. To avoid Property Mortgage Insurance, borrowers would need to put in 20% down payment. 
  3. If you’re a second time homebuyer, the down-payment  requirement is 10%. 
  4. Have a debt-to-income ratio less than 50%

Benefits

Conventional loans are ideal for borrowers with good credit who want a stable, predictable mortgage. They typically require less paperwork than FHA or VA loans and offer competitive interest rates for qualified applicants.

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