Understanding Conventional Loans: Your Key to San Diego HomeownershipMeet Trevor Sanders – San Diego’s Mortgage PartnerWelcome from SD-Loans
Hi there! I’m Trevor Sanders, and I proudly serve as your local mortgage consultant here in San Diego. At SD-Loans, we’re not just about loans—we’re about helping you unlock doors, build stability, and create a home. If you’re wondering whether a conventional loan is right for you, you’re in the right place.
Why I’m Passionate About Conventional Loans
Conventional loans are one of the most powerful tools you can use on your journey to homeownership. They offer freedom, flexibility, and financial benefits that fit perfectly with the San Diego lifestyle. My job is to make sure you understand how they work—and how to make one work for you.
What is a Conventional Loan?The Basics of Conventional Financing
A conventional loan is a mortgage that’s not insured or guaranteed by the federal government. Instead, it’s backed by private lenders and often follows the guidelines of Fannie Mae and Freddie Mac. These loans are super popular with well-qualified buyers because of their low rates and wide range of options.
How It Differs from Government-Backed Loans
FHA, VA, and USDA loans all come with specific benefits—but also extra fees and requirements. Conventional loans are more streamlined, especially if you’ve got solid credit, a good job history, and some savings. Plus, there’s no need to pay extra for government insurance.
Why Choose a Conventional Loan?Competitive Interest Rates
One of the biggest benefits of going conventional is locking in a low interest rate. The better your credit score and financial profile, the lower your rate will be. Over time, this could save you thousands—if not tens of thousands—of dollars compared to other loan types.
Flexible Loan Terms
Conventional loans give you options. Want a 30-year fixed mortgage? Done. Prefer to pay off your home in 15 years? That’s available, too. Adjustable-rate mortgages (ARMs)? Yep, we can walk you through those as well. You get to pick what fits your lifestyle and goals.
No Upfront Mortgage Insurance Required
FHA loans require an upfront mortgage insurance premium. Conventional loans don’t. That means more of your money goes straight into your home—not into fees.
Avoiding Private Mortgage Insurance (PMI) with 20% Down
Here’s a major plus: if you can put 20% down, you don’t have to pay PMI at all. Even if you don’t hit that threshold right away, you can request removal once you build enough equity—unlike FHA loans, where insurance often sticks around for the life of the loan.
Additional Perks of Conventional LoansLower Long-Term Costs
Because conventional loans avoid the added expenses of government insurance and often come with lower interest rates, they typically cost less over time. This is a huge benefit if you’re planning to stay in your home for more than a few years.
Streamlined Process for Well-Qualified Buyers
If your finances are in order, the underwriting process tends to move faster. Lenders trust strong borrowers, which means less back-and-forth and fewer hoops to jump through.
Ideal for San Diego’s Real Estate Market
Let’s face it—San Diego is a competitive market. Conventional loans give you a leg up, especially when you’re up against other buyers. Sellers often favor conventional financing because it tends to come with fewer complications and quicker closings.
Who Qualifies for a Conventional Loan?Credit Score Requirements
Ideally, you’ll want a credit score of 620 or higher to qualify. That said, the higher your score, the better your rate and terms. If you’re above 740, you’re golden.
Income and Employment Stability
We’ll look at your last two years of job history and income to make sure it’s stable. W-2 employees, self-employed folks, gig workers—we work with all kinds of borrowers.
Down Payment Expectations
A common myth is that you need 20% down. Not true. You can qualify with as little as 3% down, especially if you’re a first-time buyer. More on that below.
How Much Do You Need for a Down Payment?3% Down vs. 20% Down
With 3% down, you’ll likely have to pay PMI for a while—but that doesn’t mean it’s a bad deal. You’re still building equity and getting in the game. With 20% down, you’ll avoid PMI completely and lower your monthly payment.
First-Time Buyer Options
Fannie Mae and Freddie Mac have excellent first-time buyer programs. These include reduced PMI rates and lower credit score requirements. If you’re just getting started, we’ll help you find the best option for your budget.
Tips for Getting Approved for a Conventional LoanKnow Your Credit Score
Get a copy of your credit report and know where you stand. If your score needs a little love, I can help you create a strategy to improve it fast.
Reduce Your Debt-to-Income Ratio
Your DTI plays a big role in loan approval. Pay down credit cards or consolidate debt if you can—it can make a huge difference.
Document Your Income and Assets Thoroughly
Organize your bank statements, pay stubs, and tax returns ahead of time. The more complete your file, the faster we can get you approved.
Why Conventional Loans Work So Well in San DiegoStrong Market = Strong Competition
In a hot market like ours, the more attractive your financing package, the more likely your offer will stand out. Sellers know and trust conventional loans.
How Sellers View Conventional Buyers
When you submit an offer with a conventional pre-approval, you’re telling the seller: “I’m serious. I’m qualified. I’m ready.” That kind of confidence can help you win the home—even if your offer isn’t the highest.
Winning Bids in Competitive Neighborhoods
In areas like La Jolla, North Park, and Carmel Valley, homes don’t last long. Being armed with a solid conventional loan can give you the edge you need to secure your dream home.
Final Thoughts from Trevor Sanders
Conventional loans aren’t just another option—they’re one of the smartest ways to finance your future home, especially here in San Diego. Whether you’re buying your first condo in Mission Valley or upgrading to a family home in Poway, I’m here to help you navigate the process and find the right solution for your needs.
At SD-Loans, we don’t do cookie-cutter mortgages. We build custom roadmaps based on your goals, your finances, and your dreams. Let’s start the conversation and bring your homeownership vision to life.
Frequently Asked QuestionsAre conventional loans better than FHA loans?
If you have good credit and a decent down payment, yes—conventional loans offer lower long-term costs and more flexibility.
Can I get a conventional loan with less than 20% down?
Absolutely. You can qualify with as little as 3% down, though you may have to pay PMI until you reach 20% equity.
Do I have to pay PMI on a conventional loan?
Only if your down payment is under 20%. The good news? You can request to remove it once you reach 20% equity.
How long does it take to get approved?
Typically, 3–10 business days depending on your file. Pre-approvals can often be done in 24 hours.
How do I apply for a conventional loan with SD-Loans?
It’s easy! Just give me a call at 619-855-5061 or apply online at sd-loans.com. We’ll walk through your options together.
