Minimum Credit Score: 620
Best for people with excellent credit.
Pros and Cons
Conventional loans carry private mortgage insurance that can often be less than government insured mortgage insurance like FHA if your scores are sufficient. In addition the mortgage insurance is automatically removed when your loan balance gets down to 78% of your original purchase price.
Conventional loans often carry higher rates than government insured loans like FHA, USDA, and VA because they are not government backed. However this drawback is often offset by the cancelling of the mortgage insurance eventually, whereas FHA and USDA mortgage insurance lasts the life of the loan.
The Bottom Line
If you have above average to excellent credit or you want to purchase an investment property then a conventional loan may be the best option for you. Get ready to start realizing the benefits of home ownership!