As mortgage bankers, we carry a vast array of mortgage products, including Conventional Loans.  As far as safe loans are concerned, conventional loans gained a reputation as a staple, but there are also a variety of conventional loan products to choose from.

The primary difference between a conventional loan and other products is a conventional loan is not made by a government entity or insured by a government entity.  It’s commonly referred to as a non-GSE loan.  (A non-government sponsored entity).  Government type loans are FHA and VA loans.  An FHA loan is insured by the government and a VA loan is backed by the government.  Down payment requirements are also different.  A minimum down payment for an FHA loan is 3.5%.  for a VA loan, the minimum down payment is zero.

Amortized Conventional Loans

As a home buyer, you may take out an amortized conventional loan  with two important factors in mind; the term of the loan and the LTV, loan-to-value ratio:

  • 95% LTV with a 30 year term
  • 90% LTV with a 30 year term
  • 85%LTV with a 30 year term
  • 80% LTV with a 30 year term

The LTV can be lower than 80% and can be structured with whatever is comfortable for you as a borrower.  If however, the LTV is higher than 80% you will be required to pay for private mortgage insurance.