The conventional loan — and the day your PMI dies.

A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. Most conventional loans are 'conforming' — they meet the guidelines of Fannie Mae and Freddie Mac, including a maximum loan size set annually by the Federal Housing Finance Agency. Conventional loans typically offer the lowest long-run cost for borrowers with solid credit.

As little as 3% for a qualified first-time buyer, and 5% for most other buyers. However, any down payment below 20% triggers private mortgage insurance (PMI). Twenty percent down avoids PMI entirely. The right answer depends on whether the cash is better used as a down payment or kept as reserves.

The practical minimum is 620, but that number is misleading. Pricing improves in tiers — 620 to 679, 680 to 739, and 740 and above. A 740+ score earns materially better pricing than a 680, on the identical loan. If you are close to a tier boundary, waiting a few months to cross it can be worth more than a larger down payment.

Private mortgage insurance protects the lender, not you, and it is required on conventional loans with less than 20% down. Under the federal Homeowners Protection Act, you may request cancellation once your loan balance reaches 80% of the original property value, and the servicer must automatically terminate it at 78%. Unlike FHA mortgage insurance, conventional PMI is removable.

Usually, if you qualify. Conventional PMI is removable; FHA mortgage insurance generally lasts the life of the loan when you put less than 10% down. FHA is more forgiving on credit — down to 580 with 3.5% down. If your credit is 680 or better, conventional is almost always the cheaper long-run choice. We will run both and show you the difference.

The Federal Housing Finance Agency sets the conforming loan limit annually, and raises it in designated high-cost counties — which includes much of the Bay Area and coastal Southern California. A loan above that ceiling is a jumbo loan and follows different guidelines and pricing. Because California prices are high, many buyers here cross the line without realising it.

Yes. Gift funds from a family member are permitted on conventional loans, and with 20% down the entire down payment may be gifted. The gift must be properly documented with a signed letter confirming it is not a loan, and the funds must be traceable. Do not move money around informally before applying — it creates problems in underwriting.

It depends far more on how quickly complete documentation is assembled than on the program itself. Files where income, assets, and identity documents are gathered up front — rather than chased during escrow — close materially faster. Ask any broker for a realistic timeline in writing rather than accepting a marketing number.

Yes, but the underwriter will read the income remaining on your tax return after write-offs — which is often far below your actual cash flow. If your tax return supports the loan you want, take the conventional loan; it is cheaper. If it does not, a bank statement loan may qualify you on deposits instead. We will tell you honestly which one fits.

Often, yes. Lenders frequently want to see cash remaining after closing — commonly two to six months of mortgage payments, depending on the file. This is one reason a smaller down payment sometimes beats a larger one: emptying your accounts to reach 20% can weaken the file rather than strengthen it.