Conventional loans are the most common type of loans in the mortgage industry. These loans can be conforming or non-conforming. Conforming loans are mortgages that follow financing limits set by the Federal Housing Finance Agency (FHFA). Conventional loans offer the largest selection of loan options with competitive rates.
Conventional loans are a great option for home buyers with a solid credit score and low DTI (debt-to-income ratio), but conventional loans will not be the best option for every home buyer. Check with our Gershman Mortgage loan officers to see if a conventional loan is the best option for your unique situation.
No, you are not required to put down 20% or more with a conventional loan; however, you will be required to have PMI (private mortgage insurance) added to your monthly mortgage payment, if you put less than 20% down.
Private mortgage insurance, or PMI, is a common mortgage insurance sometimes required for conventional loans (often if a down payment under 20%). PMI can be paid in it’s entirety at closing, or added to your monthly mortgage payment.
