Conventional Loan

Conventional mortgages are loans that are not backed by the government, unlike the loans mentioned above. As a result, lenders are more selective about which borrowers they will approve for these loans.

Conventional mortgages, on average, require higher credit scores than other mortgage options, though this varies by lender. The minimum down payment is only 3%, but if you go that low — or make any down payment less than 20% — you will almost always be required to pay Private Mortgage Insurance. Unlike FHA mortgage insurance, PMI is cancellable once you have paid off enough of your loan.