What Is A Conventional Mortgage?
A conventional mortgage is a term used when a buyers purchases a property with 20% down payment. A conventional mortgage is also referred to a mortgage where the borrower doesn’t pay mortgage default insurance.
For self employed borrowers, to obtain a conventional, uninsured mortgage, traditionally they must put 35% as a down payment to get a conventional mortgage from a bank, however they can obtain a conventional mortgage from a B lender or trust company with 20% down payment.
Benefit Of A Conventional Mortgage
The benefit of a conventional mortgage is that the borrower(s) don’t pay mortgage default insurance. Unlike high ratio mortgages, often with a collateral mortgage, the lender will pay the mortgage default insurance premium to protect their mortgage investment.