A conventional loan is a mortgage loan that is not insured by the government. This means that State Bank is taking on more risk, so there may be stricter requirements for borrowers. Conventional loans typically have higher interest rates than government-insured loans, such as FHA loans and VA loans. However, they also offer more flexibility in terms of down payment requirements and loan terms.

 

To qualify for a conventional loan, you will need to have a good credit score, a steady income, and a down payment of at least 3%. You may also be required to pay private mortgage insurance (PMI), which is an insurance policy that protects the lender in case you default on your loan.

 

Conventional loans are a good option for borrowers who have good credit and can afford to make a down payment of at least 3%. They offer more flexibility than government-insured loans, but they also have higher interest rates.

 

Here are some of the pros and cons of conventional loans:

 

Pros:

 

* More flexible terms than government-insured loans

* No government-imposed restrictions on borrowers

* Lower down payment requirements than government-insured loans

 

Cons:

 

* Higher interest rates than government-insured loans

* More stringent eligibility requirements

* Private mortgage insurance (PMI) may be required