Conventional Loans

Who Might Consider Conventional?

Compare this option if you want flexibility in your down payment or have a credit profile that may qualify for competitive mortgage insurance. First-time and repeat buyers can use conventional financing.

• Some eligible programs start at 3% down; many other purchases require 5% or more.
• At 20% down, a standard borrower-paid PMI scenario generally has no monthly PMI.
• Income, credit, property and loan-size requirements still apply.

What Can Change the Cost

Credit profile, down payment, property type, occupancy, loan size, term and the day you lock a rate can affect pricing. A lower down payment may require private mortgage insurance. Some borrowers can later request its cancellation when the applicable rules are met.

• Ask Adam to explain the interest rate, APR and fees on your Loan Estimate.
• Include private mortgage insurance in the monthly payment.
• Ask about the conditions for removing mortgage insurance.

Compare with Government-Backed Options

Conventional financing can be attractive when credit, income and down payment fit its terms. FHA, VA and USDA offer other paths for eligible buyers. Adam can explain the available programs using the same price and cash budget.

What the Lender Will Verify

The lender reviews documented income, debts, assets, credit and the property. A self-employed applicant may need tax returns and business documents. A low down payment does not by itself mean the borrower has enough for closing costs and reserves.

Plan Your Down Payment with Adam

A larger down payment can reduce the loan and avoid PMI, but it also uses cash you may want for repairs or reserves. A lower down payment keeps more cash available while potentially increasing monthly costs.

• Ask for the same home price with two down-payment amounts.
• Compare the rate, PMI, cash to close and money left after closing.

Put the Guide to Work