The standard path, and often the cheapest.
For buyers with steady income and reasonable credit, a conventional loan is frequently the lowest total cost over time. We will compare it honestly against FHA and other options before recommending it.
What to know.
The honest version, in plain language, so you can decide for yourself.
How it works
Conventional loans are not backed by a government agency. They follow guidelines set by Fannie Mae and Freddie Mac, and they reward stronger credit with better pricing.
Less than you think
Some conventional programs allow a low down payment for qualified buyers. Twenty percent is not required, though putting less down usually adds mortgage insurance until you build equity.
Removable insurance
If your down payment is under twenty percent, private mortgage insurance is generally added, and unlike FHA it can typically be removed once you reach sufficient equity.
When it wins
For buyers with good credit, conventional often beats FHA on total cost. We run both so the choice is based on your numbers, not a default.
Questions we get about this.
What is a conventional loan?
A conventional loan is a mortgage that is not insured or guaranteed by a government agency like the FHA or VA. Instead it follows guidelines set by Fannie Mae and Freddie Mac. Conventional loans are the most common type of mortgage, and they tend to reward stronger credit and larger down payments with better pricing. For many well-qualified buyers they are the lowest total cost option, which is why we compare them against government-backed loans rather than assuming one or the other.
How much do I need to put down on a conventional loan?
Less than most buyers expect. While twenty percent down avoids mortgage insurance, several conventional programs allow a lower down payment for qualified buyers. Putting less down generally means paying private mortgage insurance until you build enough equity, and it affects your rate. The right amount depends on your goals: some buyers put less down to keep cash on hand, others put more down to lower the payment. We will model both so you can decide.
Conventional or FHA, which is better for me?
It depends on your credit and your down payment. FHA loans are generally more forgiving on credit and can be cheaper for buyers with lower scores, but FHA mortgage insurance often stays for the life of the loan. Conventional loans usually cost less over time for buyers with good credit, and their mortgage insurance can be removed once you build equity. There is no universal answer, which is exactly why working with a broker helps: we run both and show you the real difference for your situation.
Let’s look at your options.
Tell us your situation and we will tell you honestly what is possible, including if the answer is to wait.