3% Down Conventional Mortgage Are Back

super low down payments no longer confined to the fha 3.5% down program

The most major difference between a 3.5% down FHA loan & a 3% down Conventional loan lies with that pesky little thing called mortgage insurance. Any borrower putting down less than 20% is on the hook for mortgage insurance (called MIP for FHA & PMI for Conventional borrowers). Here’s the kicker, when a conventional borrower reaches the 20%-22% equity in their home (by way of a current appraisal) they are able to ELIMINATE the mortgage insurance payment for, well, FOREVER. An FHA borrower is on the hook for the LIFE OF THEIR LOAN regardless of the equity in their home. Conventional loans have tighter debt ratios than FHA loans & one of the borrowers has to be a first time home buyer. This is great news & should help increase access to homeownership.


Contact us if you would like a referral for an experienced loan officer who can help you find the right mortgage program for you.