Conventional Loans
A conventional loan is a mortgage that isn't insured or guaranteed by a government agency. Most follow guidelines set by Fannie Mae and Freddie Mac, and they're the most common type of home loan in the country.
Why borrowers choose conventional
- Low down payment options. Qualified buyers, including many first-time buyers, may be able to buy with a low down payment.
- Mortgage insurance that goes away. With a smaller down payment, private mortgage insurance (PMI) is usually required, but it can be removed once you reach enough equity, and it ends automatically at a set point under federal law.
- Flexible use. Primary homes, second homes and investment properties.
- Fixed or adjustable rates with a range of terms.
Is conventional right for you?
Conventional loans usually work best for borrowers with solid credit and steady income. If your credit or down payment is still a work in progress, an FHA loan may be a better fit. We'll compare both side by side.