Conventional Mortgages

Conventional mortgages are not government-backed, meaning they are not insured by the government. Borrowers who take out a conventional mortgage are responsible for paying back the loan without the help of the government.

Conventional mortgages typically require a higher down payment than other mortgage options, such as FHA loans or VA loans. The minimum down payment for a conventional mortgage is typically 5% to 20% of the purchase price, depending on the lender and the borrower’s credit profile.

Conventional mortgages typically have stricter credit requirements than other mortgage options, such as FHA loans or VA loans. Borrowers with a lower credit score or limited credit history may have difficulty qualifying for a conventional mortgage.

Conventional mortgages do not require mortgage insurance if the borrower makes a down payment of 20% or more. If the down payment is less than 20%, the borrower is required to pay private mortgage insurance (PMI) until they reach 20% equity in the property. This can increase the overall cost of the loan and can make conventional mortgages more expensive than other mortgage options. Borrowers should consider the cost of PMI when comparing conventional mortgages to other mortgage options.