What does a conventional mortgage typically require from the borrower?

A conventional mortgage typically requires stable income and a reasonable down payment from the borrower. Stability in income demonstrates the borrower’s ability to make consistent monthly payments, which is crucial for lenders when assessing the risk of lending. A reasonable down payment is also vital because it reduces the loan-to-value ratio of the mortgage and can signal to the lender that the borrower is financially responsible and invested in the property. A higher down payment generally can lead to more favorable loan terms and potentially reduce mortgage insurance costs.

In the context of this question, other scenarios do not align with the standard requirements for a conventional mortgage. For instance, having a high credit score without a down payment is generally unrealistic, as most lenders expect some level of upfront investment from the borrower. Similarly, a low credit score and a large down payment are not characteristic of conventional loans, which typically favor borrowers with good credit. Lastly, not documenting income would not be acceptable for a conventional mortgage, as lenders need to verify a borrower’s income to assess their ability to repay the loan.