Flexible Financing. More Options. A Mortgage That Fits.
I'll help you understand your options and find a loan that makes sense for your situation.
What Is a Conventional Mortgage?
A conventional mortgage is a home loan that isn't insured or guaranteed by a federal government agency, such as the FHA, VA, or USDA.
Conventional loans are a popular choice for homebuyers because they offer a variety of financing options and can be used for different property types, depending on the program and borrower qualifications.
Some conventional mortgages follow guidelines established by Fannie Mae and Freddie Mac, while other conventional loan programs may have different requirements.
As a Utah mortgage broker, I can help you explore conventional loan options from multiple lenders and explain how they compare with FHA, VA, or other mortgage programs that may be available.
Why Choose a Conventional Loan?
Conventional mortgages offer flexibility for qualified homebuyers, with financing options that can fit a variety of financial goals.
Low Down Payment Options
You may not need 20% down to buy a home. Some conventional loan programs allow qualified buyers to purchase with as little as 3% down.
Flexible Mortgage Insurance
If private mortgage insurance (PMI) is required, you may be able to request cancellation as your equity grows, subject to applicable eligibility requirements.
Property Flexibility
Conventional financing may be available for primary residences, eligible second homes, and investment properties, depending on the loan program and borrower qualifications.
Flexible Loan Options
Explore different repayment terms, including 15-year and 30-year mortgages, along with fixed-rate and adjustable-rate options where available.
Loan availability, down payment requirements, mortgage insurance, and eligibility depend on the loan program, property, and borrower qualifications.
Conventional Loan Basics for 2026
Understanding down payments, loan limits, mortgage insurance, and qualification requirements can help you decide whether conventional financing makes sense for your situation.
Down Payment Requirements
Certain conventional loan programs allow eligible borrowers to purchase a primary residence with as little as 3% down. Other programs and property types may require larger down payments.
2026 Conforming Loan Limit
This is the 2026 baseline conforming loan limit for one-unit properties in most U.S. counties, including many Utah counties. Certain high-cost areas have higher limits.
Private Mortgage Insurance
Private mortgage insurance is generally required on conventional loans with less than 20% down. Depending on the loan and applicable rules, PMI may be canceled once certain equity requirements are met.
Qualification Requirements
Lenders evaluate factors such as credit history, income, employment, existing debts, available assets, and property eligibility. Requirements vary by loan program and lender.
Not sure which program fits? Loan guidelines can vary based on your credit, property type, occupancy, and financing goals. I can help you compare your options. Request a Personalized Rate Quote.
Down Payments & Mortgage Insurance
You don't necessarily need 20% down to purchase a home with a conventional mortgage. Understanding how your down payment affects mortgage insurance can help you evaluate your options.
Less Than 20% Down
Lower upfront cash requirementCertain conventional loan programs allow eligible homebuyers to purchase a primary residence with as little as 3% down.
With a down payment below 20%, private mortgage insurance (PMI) is generally required. PMI helps protect the lender and adds to the overall cost of financing.
20% or More Down
Generally avoids private mortgage insuranceA down payment of at least 20% typically eliminates the need for borrower-paid PMI on a conventional purchase mortgage.
A larger down payment may also reduce your loan balance and monthly principal and interest payments, but it requires more cash upfront.
When Can Private Mortgage Insurance Be Removed?
One advantage of many conventional mortgages is that PMI doesn't necessarily last for the entire loan term.
For covered loans, borrowers may generally request PMI cancellation when the principal balance reaches 80% of the property's original value, provided applicable requirements are satisfied.
Automatic PMI termination generally occurs when the loan is scheduled to reach 78% of the original property value, provided the borrower is current on payments. Different requirements may apply to certain loans.
How Much Should You Put Down?
The answer depends on your savings, monthly payment goals, and overall financial situation. Putting more money down isn't automatically the best choice for every borrower.
I can help you compare different down payment scenarios, including the potential impact of PMI, so you can make a more informed decision.
Compare Your Mortgage OptionsDown payment eligibility, PMI costs, cancellation requirements, and loan terms vary by program and borrower. PMI generally protects the lender, not the homeowner. All financing is subject to applicable loan guidelines and approval.
Conventional vs. FHA Loans: What's the Difference?
Both conventional and FHA loans can help you purchase a home, but they differ in down payment requirements, credit flexibility, mortgage insurance, and property eligibility. Understanding these differences can help you decide which options are worth exploring.
| Feature | Conventional Loans | FHA Loans |
|---|---|---|
| Loan Type | Not insured or guaranteed by a federal agency. | Insured by the Federal Housing Administration. |
| Minimum Down Payment | As low as 3% for eligible programs. | As low as 3.5% for eligible borrowers. |
| Credit Requirements | Depend on the program, lender, and overall borrower profile. | Generally more flexible for borrowers with lower credit scores. |
| Mortgage Insurance | PMI is generally required with less than 20% down. | FHA mortgage insurance includes an upfront premium and ongoing premiums. |
| Insurance Cancellation | PMI may be canceled when applicable requirements are met. | For most newer FHA loans, annual MIP lasts 11 years or the loan term, depending on original LTV. |
| Eligible Properties | Primary residences, eligible second homes, and investment properties. | Generally owner-occupied primary residences. |
| Loan Limits | Conforming loans follow applicable conforming loan limits. Other conventional programs may have different limits. | FHA loan limits depend on the county and property type. |
| Potential Advantages | More property flexibility and potentially removable PMI. | Lower down payment and potentially more flexible credit guidelines. |
So, Which Loan Makes More Sense?
There's no universal answer. Conventional financing may be attractive for borrowers with stronger credit or those looking to avoid or eventually remove PMI. FHA financing may offer advantages for borrowers who benefit from its more flexible qualification guidelines.
What matters is comparing the actual numbers, including interest rate, APR, monthly payment, mortgage insurance, cash needed to close, and total financing costs.
I can help you explore both programs and understand how they compare for your individual circumstances.
This comparison is for general educational purposes. Loan eligibility, down payment requirements, insurance premiums, loan limits, and financing costs vary by program, lender, property, and borrower qualifications. FHA mortgage insurance duration rules differ for certain older loans.
Conventional Loan Frequently Asked Questions
Mortgage guidelines can be confusing. Here are straightforward answers to some of the questions I hear most often from Utah homebuyers.
Do I need 20% down for a conventional loan?
No. Some conventional loan programs allow eligible borrowers to purchase a primary residence with as little as 3% down.
The required down payment depends on the loan program, property type, and your qualifications. A down payment below 20% generally requires private mortgage insurance.
What credit score do I need?
Credit requirements vary depending on the loan program, lender, and underwriting approach.
Many conventional loan scenarios have traditionally used a 620 minimum credit score, but not every program uses the same threshold. Your full financial picture also matters.
Can I remove private mortgage insurance?
On many conventional mortgages, yes. For covered loans, borrowers can generally request PMI cancellation when the principal balance reaches 80% of the home's original value, subject to applicable requirements.
Automatic termination generally occurs when the loan is scheduled to reach 78% of the original value, provided payments are current. Loan-specific rules and exceptions may apply.
Can I use gift funds for my down payment?
Yes, gift funds may be permitted on eligible conventional mortgages, particularly for primary residences and certain second-home transactions.
The donor, documentation, and any required borrower contribution must meet the program guidelines. Eligible assistance programs may also be available.
Can I buy an investment property with a conventional loan?
Yes. Conventional financing can be available for eligible investment properties.
Down payment, reserve, credit, and other qualification requirements generally differ from those for a primary residence. You can also explore investment property financing options .
Are conventional loans only for first-time homebuyers?
Not at all. Conventional mortgages can be used by first-time buyers, repeat buyers, homeowners refinancing an existing loan, and eligible property investors.
However, some special low-down-payment programs have additional eligibility requirements.
How do I know whether conventional or FHA financing is better?
It depends on your credit profile, down payment, mortgage insurance, available interest rates, property type, and financial goals.
Comparing the monthly payment, cash needed to close, and total financing costs for both programs can help you make a more informed decision.
You can also review my Utah FHA loan information .
Still Have Questions?
Every mortgage scenario is different. If you'd like help evaluating your options, I'm happy to take a look at your situation.
Schedule a ConversationReady to Explore Your Conventional Loan Options?
Whether you're buying your first home, moving to your next one, or considering a refinance, understanding your financing options is a good place to start.
Let's find out what makes sense for your situation.
Requesting a personalized rate quote starts with a short inquiry form. The mortgage application opens our secure loan portal. An inquiry does not authorize a credit check or guarantee a particular rate or loan approval.
Prefer to talk directly? Call me at (801) 810-9445
Corey Moser | NMLS #274942 Nationwide Loans, Inc. | NMLS #1799965 Equal Housing Lender