Conventional Home Loans

A conventional loan is a home loan that is not backed by a government agency. It is the most common way buyers in North Idaho finance a home, and it works well for buyers with steady income and good credit.

What you need to qualify

Lenders look at your credit score, your income, your debts and your savings. A credit score of 620 or higher is a common starting point. Your total monthly debts, including the new house payment, usually need to stay under about 45 percent of your income.

Down payment options

Many buyers assume a conventional loan requires 20 percent down. It does not. Some programs allow as little as 3 percent down for first-time buyers and 5 percent for others. If you put down less than 20 percent, you will pay private mortgage insurance until your equity reaches 20 percent, and then it can be removed.

If saving the down payment is the hard part, ask about down payment assistance. Idaho Housing and some lenders offer programs that can be paired with a conventional loan. Idaho also offers a First-time Home Buyer Savings Account, which lets you deduct up to $15,000 a year ($30,000 for couples filing jointly) from your Idaho taxable income while you save.

Where conventional loans fit in North Idaho

Conventional loans can be used for primary homes, second homes and investment property, which makes them flexible for our area. They also work for many rural and acreage properties that other programs cannot finance, though land with a lot of acreage may need a different type of loan.

Next steps

We are not lenders, but we work with local lenders every week and are happy to connect you with one who can review your situation. Call us at (208) 267-2100 or send us a note on our contact page.