A conventional mortgage is a home loan that is not insured or guaranteed by a government agency, such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA).

Unlike FHA or VA loans, conventional mortgages are not backed by the government. They typically have stricter qualification criteria, but they offer more flexibility in terms of loan amounts, property types, and loan terms.

The down payment requirements for conventional loans can vary, but generally, a down payment of at least 3% to 5% of the home's purchase price is common. However, a higher down payment may be required to avoid private mortgage insurance (PMI).

PMI is insurance that protects the lender in case the borrower defaults on the loan. It is typically required when the down payment is less than 20%. Borrowers can request the removal of PMI once they reach 20% equity in the home.

Yes, conventional loans can be used for various property types, including primary residences, second homes, and investment properties. This flexibility is not always available with government-backed loans.

Advantages include competitive interest rates, flexible loan terms, and the ability to finance a wide range of property types. Additionally, once a certain level of equity is reached, borrowers can eliminate PMI.

While specific requirements can vary among lenders, a higher credit score is generally needed for a conventional mortgage. A credit score of 580 or higher is often considered the minimum, but higher scores can result in better interest rates.

The LTV ratio is the ratio of the loan amount to the property's appraised value. Conventional loans often have lower LTV ratios, and a lower ratio may result in more favorable terms, such as lower interest rates and reduced PMI requirements.

Yes, conventional loans allow for prepayment or early repayment without prepayment penalties. This flexibility allows borrowers to save on interest costs by making extra payments.

Unlike some government-backed loans that may have income restrictions, conventional loans generally do not have specific income limits. Instead, lenders assess a borrower's debt-to-income ratio to determine eligibility.

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