Conventional Loan – 3% Down

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Lenders will soon offer a conventional loan with as little as 3% down.

The Conventional 3% down payment program offers certain advantages over FHA loans.  One being that FHA loan program requires at least a 3.5% down payment.  The Conventional 3% down payment program tends to be a bit easier to work through and the loan costs are generally lower than FHA loans.  FHA loans typically carry an upfront mortgage insurance premium of 1.75% of the loan amount.  Conventional loans are more demanding in regards to a borrower’s credentials.  In order to qualify, the debt-to-income ratios are lower than what is allowed on the FHA loan.  Higher credit scores are also needed on the Conventional loan, than that of the FHA loan.

FHA borrowers are locked into a longer mortgage insurance period than those with conventional loans.  With FHA loans, they require mortgage insurance for the first 5 years of the loan.  After the 5 years has elapsed and there is 22% equity in the property, you can get it removed.  With conventional loans, you must keep your mortgage insurance for 2 years but is automatically removed once the loan-to-value ratio reaches 78% of the original purchase price.

FHA loans still offer great options for borrowers who have a lower down payment.  But for a client who has stronger earnings and credit scores, always look at the conventional 3% down program first.

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Since 1970 Rinetti & Co. Realtors has been selling residential real estate throughout the greater East Bay. We are boutique real estate company with a single focus, exceptional customer service from start to finish. Rinetti & Co. has the experience and practical knowledge to adapt to changing market conditions while providing our clients expert advise when buying or selling a home. If you’re considering making a move please contact us and see the difference Rinetti & Co. Realtors can make for you.


The only realtors in San Leandro. Extraordinarily knowledgeable about the area, professional, flexible, and willing to provide their input and insights. Very easy to work with and very responsive throughout the looking and buying process. You will not meet two finer or more ethical realtors. The best! - Gary S.

Rinetti & Co. turned out to be the perfect place for me to do business. I was extremely pleased with their operation from listing until sale of home. They made sure all bases were covered from beginning to end. I would not hesitate to recommend their services to anyone buying or selling property. - Mary K.

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