The default, and usually the cheapest
Conventional Loans
3% down is real. So is cancelling the mortgage insurance later. For most people with decent credit this is the cheapest loan on the table.
Conventional is the loan most people end up with, and for good reason: when it fits, it's usually the cheapest money available.
What it takes
- 3% down for a qualifying first-time buyer
- 5% down otherwise
- 620 credit as the usual floor, with pricing improving at 660, 700, 740 and 780
- Mortgage insurance under 20% down — cancellable, unlike FHA
The 20% myth
The belief that you need 20% down keeps people renting for years while prices move away from them.
You need 3%. Under 20% you pay private mortgage insurance, and that insurance ends. You can request cancellation once you reach 80% loan-to-value, and the lender must remove it automatically at 78% on the original amortisation schedule.
Paying PMI for four years is very often cheaper than waiting four years to save a larger down payment. Run the numbers before you assume otherwise. I'll run them with you.
The credit score cliffs
Conventional pricing steps at specific scores: 620, 660, 680, 700, 720, 740 and 780. The steps are not small.
If you're sitting at 738, waiting a month to cross 740 can be worth more than anything else you do. This is one of the few places where a short delay is genuinely the right advice, and I'll tell you when you're close.
Loan limits for 2026
The one-unit conforming baseline is $832,750. High-cost counties rise to $1,249,125.
Orange County is at the high-cost ceiling. A $1.1 million loan here is conforming; the same loan in most of the country is jumbo and priced differently. That single fact changes your rate and your down payment, and plenty of borrowers never learn it.
When conventional loses
It isn't always the answer.
- Credit below the low 700s — FHA often prices better
- Eligible veteran — VA beats it outright, with nothing down and no mortgage insurance
- Self-employed with heavily written-down returns — a bank statement loan may be the only option
Before I put a self-employed borrower into a non-QM program, I test conventional properly with add-backs: depreciation, amortisation, business use of home, one-time expenses. Banks routinely quit before doing this. If the returns work after add-backs, conventional is the cheaper loan and that's where you belong.
Get a free rate quote.
No application. No credit pull. A written comparison across 175+ lenders, with the APR on each.
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Send this and I'll come back with a written comparison: real terms, real fees and an APR on every option. No credit is pulled. If your current deal already wins, I'll say so.
Questions people ask
Do I really need 20% down?
No. That myth costs people years. Conventional goes to 3% down for a first-time buyer and 5% otherwise. Under 20% you pay mortgage insurance, and you can cancel it later.
When does conventional PMI come off?
You can request cancellation at 80% loan-to-value, and it must be removed automatically at 78% based on the original schedule. Unlike FHA, it is not permanent.
What credit score do I need?
620 is the usual floor. Pricing improves at 660, 700, 740 and 780. The jump from 739 to 740 is worth real money, so if you are close, it is worth waiting a month.
What is the 2026 conforming loan limit?
The one-unit baseline is $832,750, and high-cost counties go up to $1,249,125. Orange County is at the high-cost ceiling, so loans that would be jumbo elsewhere are conforming here.
Let’s look at your numbers
Fifteen minutes. Your real numbers. No pressure.
Call or text my cell, or book a time. You’ll get a written comparison with real terms and an APR on every option, and if your current deal already wins, I’ll tell you.