What is Conventional Loan?
A conventional loan is a mortgage that is not insured or guaranteed by a government agency, and it is the most common loan for buyers with solid credit and steady income. Down payments can be as low as 3%, but putting down less than 20% usually means paying private mortgage insurance until enough equity is built.
Example: A buyer with good credit puts 10% down on a conventional loan, pays PMI for a few years, then has it removed once the balance reaches 80% of the home’s value.