The loan most buyers end up with.

No. That figure is the most persistent myth in home buying. Some eligible conventional programs allow 3 percent down, and many buyers put down 5 percent or more. What 20 percent buys is the removal of private mortgage insurance from day one and smaller pricing adjustments. For some buyers, waiting years to save it can cost more in rent and rising prices than the insurance would have; for others it will not. The right choice depends on your local market, rate, PMI cost and time horizon.

You can request cancellation once your balance reaches 80 percent of the original value, and the lender must remove it automatically at 78 percent while the loan is current. Some servicers and investors also allow cancellation based on current value after appreciation, under additional conditions; ask your servicer which rules apply. FHA works differently: its annual premium runs 11 years or the full loan term depending on the original loan-to-value, and refinancing into a conventional loan is one way to change that arrangement if you qualify and the numbers work.

Credit is usually the deciding factor. Above roughly 680 a conventional loan tends to cost less overall, because the mortgage insurance is usually cheaper, can be cancelled at 20 percent equity on the original value, and there is no 1.75 percent upfront fee. Below 620 FHA is generally the realistic route. In the band between, we price both and show you the total cost of each over the years you expect to keep the loan.

Most conventional lenders start at 620. Pricing improves in steps as your score rises, with the most favorable pricing and the lowest mortgage insurance costs from about 740. A 40-point improvement can be worth more than a bigger down payment, so if you are close we will tell you what specifically is holding the score down.

The Federal Housing Finance Agency sets the largest loan Fannie Mae and Freddie Mac will buy, and it changes each year. Higher-cost counties get a raised limit. A loan above the limit for your area is a jumbo loan, which has its own credit, reserve and down payment requirements.

Yes, and it is the main reason investors choose conventional financing. FHA and VA loans are for primary residences only. Expect to put 15 percent or more down on a single-unit rental, hold around six months of payments in reserve, and pay a slightly higher rate than on a primary home.

On a primary residence and a second home, yes. The donor signs a letter confirming the money is a gift and not a loan, and we document where it came from. On an investment property gift funds are generally not permitted, and the down payment has to be your own.

Most borrowers take the fixed rate. An adjustable rate can make sense when you expect to move or refinance during the fixed period, or when its lower opening rate is worth the later adjustment risk to you. Before choosing one, know the adjustment schedule, the caps and the highest payment the loan could reach.

Size, mainly. A conventional conforming loan fits inside the annual limit and follows Fannie and Freddie rules. Above that limit, a jumbo loan is held by the lender or sold privately, so requirements tighten: higher credit scores, larger down payments and several months of reserves.

Yes, and many FHA borrowers do exactly that. Once your credit and equity improve, refinancing from FHA into a conventional loan removes the FHA mortgage insurance entirely. Whether the move pays for itself depends on the new rate, the closing costs and how long you keep the loan; we run that break-even before anything is ordered.