Requirements For Mortgage Down Payments On Conventional Homes

Today, conventional home mortgages will ask for around 3 to 20% of the property price as down payment. You may be required to pay a down payment depending on your income and credit score, as well as the home loan amount.

You might be thinking that a lower down payment is easier for you to get a house of your own, but you might be asked to pay for pricier mortgage insurance if you don’t have to say, around 20% equity of the house.

Keep these things in mind when you are looking for options when it comes to loans.


A conventional loan is not insured by the federal mortgage programs sponsored by any FHA home loans Texas. These are loans that meet the standards of the government-sponsored  Fannie Mae and Freddie Mac. These buy home mortgages in the secondary market which result in the freeing up of capital for lenders so they can continuously lend to homebuyers.

Conventional loans usually have a requirement of at least 680 FICO score of around 5% of the purchase price for the down payment.

Also Read: What Is a Conventional Loan?

Conventional 97 Loan

This type allows a person to apply for a home loan using only 3% down payment. The borrowers have to be the owner-occupant type of buyers from a dwelling of only a single-family. It usually is intended for homebuyers who are buying for the first time especially the ones who haven’t purchased or owned any house in the last three years. The maximum loan that a person can avail is $424,100 only.

Rates and Credit Scores

As mentioned above, conventional loans are for borrowers with more than 680 FICO scores. Those with a lower score are still qualified but they need to pay an adjustment charge, and they will have a loan that’s more expensive. This is mostly the same between a borrower who pays the 20% down payment and another borrower who pays 3%.

Savings With More Down Payment

If you put around 5-10% down, you get to save more on your loan with lower interest rates. The difference can reach a decrease of up to a quarter point for higher down payments. There’s a difference in monthly payments. As such, always check the numbers to see if you can buy the property earlier with a lower down payment or wait more time and save more money to include in your down payment.


When it comes to conventional loans, you are not allowed to loan money for your down. Several programs offer around 5% in grants to first-time homebuyers for closing costs and down payment. Aside from that, borrowers can have access to about $10,000 from retirement accounts. These withdrawals are not included in the penalty of early withdrawals, but you have to keep in mind that these are subject to an income tax. Gifts from your family members are also said to be accepted.

If you are considering conventional home loans, you have to consider the ones mentioned above before making any decision. Is it the one for you?