Conventional
Understand conventional mortgages, conforming loan limits, down payments, private mortgage insurance, and how to compare them with government-backed loans.
A conventional mortgage is not insured or guaranteed by a federal housing agency. Conforming conventional loans follow Fannie Mae or Freddie Mac guidelines and stay within the loan limit for the property’s county and unit count. They can support a home purchase or refinance, with occupancy rules that vary by product.
Potential benefits
- Some eligible primary-residence programs allow a down payment below 20%; a smaller down payment is not available for every borrower or property.
- Fixed-rate and adjustable-rate structures may be available, with different payment risks and total borrowing costs.
- Private mortgage insurance (PMI) on eligible loans may be canceled when applicable equity and payment-history requirements are met.
Eligibility and documentation
Expect a review of credit, documented income, debts, assets, occupancy, and the property appraisal. The down payment and reserve requirements depend on the loan, unit count, and whether the home is a primary residence, second home, or investment. Check the current county conforming limit rather than assuming one nationwide maximum.
Costs and tradeoffs
PMI is typically required with less than 20% down. Credit profile and loan-to-value ratio affect pricing, and a low-down-payment conventional loan is not automatically cheaper than FHA. Compare mortgage insurance, closing costs, and total monthly payments using written Loan Estimates.
Is this program right for you?
Consider conventional financing when your documented finances support the payment and you want to compare flexible occupancy options or the potential to remove PMI. Compare FHA as well if credit or upfront cash makes conventional terms less suitable.
Continue your research
This is general education, not a commitment to lend or confirmation that Home1st Financial offers every product described. Availability depends on participating lenders, property location, and verified licensing. Eligibility, rates, fees, and terms require a complete application and lender approval.