Conventional Loans

Most conventional mortgages have either fixed or adjustable interest rates.

Typical fixed interest rate loans have a term of 15 or 30 years. A shorter-term loan usually results in a lower interest rate.
Adjustable-rate mortgages, or ARMs, fluctuate in relation to the rate of a standard financial index, such as the LIBOR. Monthly payments can go up or down accordingly.

Conventional loans require as little as 5% down.

If the borrower provides a down payment of less than 20% of the sales price, private mortgage insurance (PMI) will be required. PMI is typically either a monthly or one-time premium that is paid to protect the lender in instances where the borrower defaults. With a down payment of 20% or more, no PMI is required.