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Choosing the right mortgage is the most critical financial decision you will make during the home-buying process. While government-backed options like FHA and VA loans are popular, the Conventional Loan remains the “gold standard” for buyers with solid credit and stable finances.
But is it the right fit for your specific goals? In 2026, with the conforming loan limit reaching $832,750, conventional financing offers more flexibility than ever for homeowners in Kansas and Missouri.
5 Signs a Conventional Loan is Your Best Move
- You Have a Credit Score of 720+: While you can qualify with a 620, conventional loans reward high scores with the lowest interest rates in the market. Check our Credit Score Tiers guide to see where you land.
- You Want to Cancel Your Mortgage Insurance: Unlike FHA loans, where mortgage insurance often lasts for the life of the loan, conventional Private Mortgage Insurance (PMI) can be removed once you reach 20% equity. Learn more about how to cancel PMI here.
- You Are Buying an Investment Property: FHA and VA loans are strictly for primary residences. If you’re looking to build a rental portfolio, a conventional loan is your primary path.
- You Have a Small Down Payment: Many buyers are surprised to learn that the Conventional 97 program allows for just 3% down—even lower than the FHA’s 3.5% requirement.
- You Want a Competitive Edge: In the fast-moving Overland Park housing market, sellers often prefer conventional offers because the appraisal process is less stringent than government-insured programs.
The Technical Checklist for Eligibility
To qualify for a conventional loan in 2026, your financial profile should generally meet these “Big Three” requirements:
- Debt-to-Income (DTI): Most lenders prefer a DTI of 43% or lower, though some exceptions are made up to 50% for high-credit borrowers. See our DTI Ratio Guidelines for more details.
- Documentation: You will need to provide full proof of income, including W-2s and tax returns. Review our Documentation Checklist to get a head start.
- Property Type: Conventional loans can be used for single-family homes, condos, and even 2-4 unit properties (as long as they meet Fannie Mae/Freddie Mac standards).
Conventional vs. The Rest: A Quick Comparison
How does the conventional loan stack up against other popular programs?
| Feature | Conventional | FHA Loan |
|---|---|---|
| Min. Down Payment | 3% – 5% | 3.5% |
| Mortgage Insurance | Cancellable at 20% Equity | Often Permanent (MIP) |
| Upfront Fees | None | 1.75% Funding Fee |
| Appraisal Rules | Market Value Focused | Strict Safety/Health Focus |
Final Verdict: Is it Right for You?
The “right” loan depends on your long-term goals. If you plan to stay in your home for more than five years and have a credit score above 700, a conventional loan is almost always the most cost-effective choice because it allows you to eliminate mortgage insurance without refinancing.
However, if your credit is still a work in progress, you might want to compare the FHA vs. Conventional Closing Costs to see which fits your immediate budget better.
Ready to find out which program saves you the most money?
Get a Personalized Loan Comparison Quote Today