What is the primary benefit of using a conventional loan?

The primary benefit of using a conventional loan is that no mortgage insurance is required if the down payment is 20% or more. This feature makes conventional loans particularly appealing to borrowers who can afford a larger down payment, as it allows them to save on the cost of mortgage insurance premiums, which can add a significant expense to monthly payments. By avoiding mortgage insurance, homeowners can also build equity more quickly and reduce their overall financial burden related to the loan.

Other options, while they may present some advantages, do not represent the core benefit as effectively as the removal of mortgage insurance for substantial down payments. Conventional loans still tend to have interest rates that can vary, and their flexibility in terms may not cater to all borrowers equally. Additionally, credit scores play a crucial role in the approval of conventional loans, and there is no automatic acceptance regardless of credit history. Thus, the elimination of mortgage insurance with a 20% down payment stands out as a key advantage of this type of loan.