Conventional loans, with the choices laid out plainly
A conventional loan isn't one product — it's a set of trade-offs: down payment, rate, points, and lender credits. We price your scenario multiple ways so you can see what each version actually costs before you choose.
Who a conventional loan fits
Backed by Fannie Mae or Freddie Mac guidelines rather than a government agency, conventional financing is often the most flexible starting point — for buyers with steady income, decent credit, and a range of down payment amounts.
Buyers with 5–20% down
The most common path for repeat buyers and move-up purchases across Connecticut.
Strong credit, want flexibility
No upfront mortgage insurance premium, and private mortgage insurance (PMI) that can be removed once you reach 20% equity.
Second homes & investment property
Unlike FHA and USDA, conventional financing covers second homes and, with adjusted terms, investment properties too.
Same conventional loan. Different structures.
An illustrative $450,000 conventional purchase, priced three ways.
| Strategy | Rate | Points / credit | Est. payment |
|---|---|---|---|
| Buy the rate down | 6.125% | 1.25 pts | $2,736 |
| Balanced | 6.5% | $0 | $2,844 |
| Lender credit toward costs | 6.875% | 1.0 pt credit | $2,955 |
Illustration only. Actual rates, pricing, and PMI depend on your credit profile, down payment, property, and current market conditions.
Conventional vs. FHA, at a glance
Both are common paths to homeownership — the right one depends on your down payment, credit, and long-term plans.
Conventional loans
- PMI can be removed once you reach 20% equity
- No upfront mortgage insurance premium
- Works for primary homes, second homes, and investment property
- Better pricing with stronger credit scores
Where FHA may win instead
- Lower minimum credit score requirements
- Down payments as low as 3.5%
- More flexible on past credit events
Conventional loan questions
What credit score do I need for a conventional loan?
Most lenders look for a minimum credit score around 620, though your rate and PMI cost improve meaningfully as your score climbs above 680–700. We'll show you where you stand and what moving up a tier could save.
How much do I need down?
As little as 3% for qualifying first-time buyers on a fixed-rate loan, though 5–20% is more typical. A larger down payment lowers or eliminates monthly PMI.
When does PMI go away?
You can generally request PMI cancellation once your loan balance reaches 80% of the home's original value, and it's required to be removed automatically at 78%, assuming your payments are current.
What's the 2026 conforming loan limit?
$832,750 for a one-unit home in most U.S. counties, including all of Connecticut. Loans above that amount are considered jumbo financing.
See your conventional loan options side by side
No cost, no obligation — we'll price your scenario multiple ways before you decide.