Consider a Conventional Loan

Conventional loans are mortgage loans offered by non-government sponsored lenders. A conventional, or conforming, mortgage adheres to the guidelines set by Fannie Mae and Freddie Mac. It may have either a fixed or adjustable rate.

While many think that a 20% down payment is required for all conventional loans, many lenders now offer low down payment options, including a 3% down payment program. Down payment requirements can vary based on the lender as well as the borrower’s credit history.

In addition to the down payment, borrowers are often responsible for origination fees, mortgage insurance, and appraisal fees. As such, conventional loans may have a higher out-of-pocket cost at closing than other types of mortgage loans.