Conventional home loans in San Jose

What “conventional” actually means

A conventional loan is one that isn’t insured by a government agency. Most of them follow the rules set by Fannie Mae and Freddie Mac, which is why you’ll also hear them called conforming loans: the loan amount, your credit, your income and the property all have to fit inside those rules. In return, they’re offered by almost every lender, which makes them the easiest loan to compare and often the best-priced option when you qualify for one.

Who it fits

Salaried (W-2) income with a steady history, a down payment and reserves you can document, and a property without complications. If that’s you, conventional is where the comparison starts. If another program doesn’t beat it for your situation, there’s no reason to use it.

What it covers

• Purchase. Fixed-rate and adjustable options for a primary home, a second home, or an investment property.
• Rate-and-term refinance. Change the rate or the length of the loan without taking cash out.
• Cash-out refinance. Take equity out as cash. If the rate on your current loan is already low, a home equity line usually does this job without giving that rate up. See home equity.
• High-balance loans. Loan limits in high-cost counties like Santa Clara are higher than the national baseline. Above the county limit you’re in jumbo territory.

Fixed or adjustable?

A fixed rate stays the same for the life of the loan. An adjustable-rate mortgage (ARM) is fixed for an initial period and then adjusts on a schedule. An ARM can make sense when you’re confident you’ll sell or refinance within the fixed period; it’s a bet on your own timeline, and I’ll say so if I think the bet is a bad one. I show both so the difference is a number, not a feeling.

Do I need a large down payment?

Not necessarily. Conventional loans allow lower down payments where they fit. With less down, the lender usually requires mortgage insurance, which adds to the monthly payment until you’ve built enough equity for it to come off. Whether a smaller down payment is worth it depends on your savings, the price range and how long you plan to keep the loan. I run both versions.

Does my credit score matter if I qualify?

Yes. Conventional pricing is tiered by credit score and down payment, so your score affects more than whether you qualify: it changes what the loan costs. If your score is borderline, tell me early. Sometimes one small fix before the credit pull is worth a lot, and I won’t pull your credit until it actually helps you.

Refinancing: the two questions that matter

Not “is the new rate lower” but “how long until the closing costs pay for themselves” and “what happens to total interest if I restart a 30-year clock.” The refinance calculator shows both. If the answer is that it doesn’t pencil out, I’ll tell you that too.

What lenders will want to see

The documentation is the standard set, and I map it to your profile at the start so there are no surprises later:

• Recent pay stubs and W-2s (or tax returns, if you have other income)
• Bank and asset statements for the down payment and reserves
• Identification and details of the property you’re buying or refinancing

How I approach it

Because I work as a broker, one application is compared across many wholesale lenders rather than one bank’s menu. I lay the options side by side, trade-offs included, and you can test the numbers yourself on the payment and affordability calculators.

General information only; not a commitment to lend, a rate quote, or an offer of credit. Programs and terms are subject to change; not all applicants will qualify.