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One of the first questions buyers ask when exploring a conventional loan is simple: do I qualify? The answer depends on a handful of key factors — your credit score, your income, your debt load, and your down payment savings.
None of these requirements are as intimidating as they might sound. Here’s a plain-language breakdown of exactly what lenders look for and how each factor affects your approval.
Your credit score is one of the most important factors in a conventional loan approval — it affects not just whether you qualify, but what interest rate you receive.
Minimum credit score: 620
Best rates typically start at: 680 and above
Here’s a general sense of how credit score tiers affect your conventional loan:
620-639: You may qualify, but expect higher rates and potentially stricter requirements on other factors like down payment and DTI.
640-679: A solid qualifying range with reasonable rates, though not the most competitive available.
680-719: You’ll see noticeably better rates in this range and more flexibility on other qualifying factors.
720 and above: This is where you’ll typically access the most competitive rates and the most favorable loan terms available.
If your score is currently below 620, a conventional loan may not be available to you right now — but that doesn’t mean homeownership is off the table. FHA loans accept scores as low as 580, and a short period of focused credit improvement can move you into conventional territory faster than you might expect.
Conventional loans don’t have a minimum income requirement — what matters is that your income is stable, verifiable, and sufficient to support your proposed monthly payment along with your existing debts.
Types of income lenders accept:
How long do you need to be employed?
Most lenders look for a two-year employment history in the same field. That doesn’t mean you need to have been at the same job for two years — career progression within the same industry is generally fine. Gaps in employment, recent career changes, or a switch to self-employment may require additional documentation and explanation.
Your debt-to-income ratio is the percentage of your gross monthly income that goes toward monthly debt payments. It’s one of the most important qualifying factors for a conventional loan because it tells lenders how much financial breathing room you have.
How DTI is calculated:
Add up all your monthly debt payments — proposed mortgage payment, car loans, student loans, credit card minimums, and any other recurring debt obligations — then divide that total by your gross monthly income (before taxes).
For example: if your proposed mortgage payment is $1,500 and your other monthly debts total $500, your total monthly debt is $2,000. If your gross monthly income is $6,000, your DTI is 33%.
Conventional loan DTI guidelines:
What counts toward DTI:
What doesn’t count toward DTI:
Conventional loans must fall within conforming loan limits set by the Federal Housing Finance Agency (FHFA). For most counties in South Carolina, the 2025 conforming loan limit is $806,500 for a single-family home.
Loans above this limit require a Jumbo loan, which typically comes with stricter credit and reserve requirements. If you’re shopping in higher price ranges, ask your loan officer whether your target purchase price falls within or above the conforming limit for your specific county.
Beyond income, lenders also want to see that you have sufficient assets — not just for your down payment and closing costs, but often for reserves as well.
Reserves are funds remaining in your accounts after closing. Lenders typically want to see two to six months of mortgage payments in reserve, depending on the loan and your overall financial profile. These funds show that you have a financial cushion if your income were temporarily disrupted.
Acceptable asset sources include checking and savings accounts, retirement accounts (at a discounted value), investment accounts, and gift funds from family members in some cases.
No single factor determines your approval on its own. Lenders look at your full financial picture — and a strength in one area can sometimes offset a weakness in another. A higher credit score may compensate for a slightly higher DTI. A larger down payment may offset a shorter employment history.
The best way to know where you stand is to sit down with a local loan officer who will review your actual numbers — not just run you through a generic online calculator — and give you a realistic picture of what you qualify for and what, if anything, needs attention before you apply.
For a full overview of conventional loan benefits and the application process, visit our Conventional Loans page.
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