A conventional mortgage refers to a loan that is not insured or guaranteed by the federal government. A conventional, or conforming mortgages adheres to the guidelines set by the Fannie Mae and Freddie Mac. It may have either a fixed or adjustable rate.
- You can use conventional loan to buy a primary residence, second home, or rental property
- Conventional loans are available in fixed rates, adjustable rates(ARMs), and offer many loan terms usually from 10 to 30 years
- Down payments as low as 3%
- No monthly mortgage insurance with a down payment of at least 20%
- Lower mortgage insurance costs that FHA requires
- Mortgage insurance is cancelable when home equity reaches 20%