Conventional loans are the most common loan in the market today.
Conventional loans work best when you have more than 10% equity or down payment, and you have higher credit scores. Conventional loans can also be used for a greater variety of property types and loan purposes.
If you have less than 20% equity, you are required to have mortgage insurance, however, depending on the loan-to-value and your credit scores, the mortgage insurance can be very inexpensive. If you have at least 20% equity or are making a 20% down payment, then Conventional loans are hard to beat.
-Minimum 5% equity or down payment (3% in limited cases)
-Any loan amount (over $417,000, would be considered a Jumbo loan)
-640 minimum credit score
-Mortgage insurance required for loan-to-value over 80%
-Limited gift funds allowed on purchase
-30 year, 20 year, 15 year terms (other terms available)
-Both fixed rate and adjustable rate programs
-No prepayment penalties