Benefits of a Conventional Mortgage Loan

Discounted Fees

Special mortgages in income targeted areas

Vacation Home

Vacation and rental home mortgages

Low Down Payment

As low as 3% to 5% down payment

PMI Removable

Flexible mortgage insurance options

2018 Conventional Loan Limits by State

AL AK AZ AR CA CO CT DE FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY DC

FAQ About Using a Conventional Mortgage Loan

Do I need 20% down payment for a Conventional mortgage?

Conventional mortgages do not require a 20% down payment.  This is a common myth that simply is not true.

Both Fannie Mae and Freddie Mac allow as low as 3% down payment if you're purchasing a single family home, using a fixed rate mortgage, at or under the conforming loan limit.

Is mortgage insurance required on a Conventional mortgage?

PMI, or Private Mortgage Insurance, is required with any Conventional mortgage above 80% of the value of the home.

One of the many advantages of Conventional PMI over FHA mortgage insurance is that PMI rates scale with the actual loan to value at the time you lock in the loan.  If you have a 10% down payment, your PMI will be less than if you have a 3% down payment.

Another great advantage of Conventional is the ability to use LPMI, or Lender Paid Mortgage Insurance.  This essentially means that the mortgage insurance premiums are rolled into a slightly higher interest rate.

Conventional PMI can be removed in the future without refinancing your existing mortgage.

What is the minimum down payment for an investment property?

Conventional mortgages are commonly used to buy investment property for rental income.  The minimum down payment is determined by the number of legal units in the home.

Investment Property Down Payment Requirement Chart:

  • 15% Down Payment - Single family residence (SFR)
  • 25% Down Payment - 2 to 4 Units (Duplex, Triplex, Fourplex)

These Loan to Value (LTV) guidelines apply to both Fannie Mae and Freddie Mac mortgages.

Top Articles About Conventional Mortgages

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