Conventional Loans
Conventional Financing
A Conventional home loan is a standard home mortgage that allows as little as 3% down payment. It is available to both first-time and repeat homebuyers. The interest rate for a Conventional loan is dependent on down payment and credit score, and typically requires PMI (Private Mortgage Insurance) if there is less than 20% down payment.
The "20% Down Payment" Myth
A buyer can put less than 20% down on a conventional loan by opting for PMI. The cost of PMI depends on several factors, including your down payment amount, credit score, debt-to-income ratio, and whether you’re a first-time or repeat homeowner. It’s important for your lender to review PMI with you, as the cost isn’t a flat rate and can vary based on your individual profile. PMI also isn’t something to fear—it’s not nearly as expensive as it used to be, and in many cases the monthly cost is surprisingly manageable for today’s buyers.
Conventional Loan Quick Facts
What credit score do I need for a Conventional loan?
680+ credit scores, though higher scores may qualify you for better rates and lower mortgage insurance costs.
How much do I need for a down payment?
Down payments for conventional loans can be as low as 3% for qualified buyers. Your exact amount depends on credit, income, and property type.
Do I have to live in the home?
Not necessarily. Conventional loans can be used for primary residences, second homes, and investment properties, giving buyers flexibility.
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