When can I remove PMI on a conventional loan?

PMI can be cancelled by request once you reach 20% equity, and terminates automatically at 78% loan-to-value under federal law.

Conventional Mortgages

Buy your Long Island home with a lender that follows the actual guidelines - no overlays.

Q: What are Fannie Mae and Freddie Mac?

They are government-sponsored entities that buy conventional loans from lenders and set the underwriting guidelines those loans must meet, including minimum credit score, down payment, and debt-to-income ratio.

Conventional loans are the most common mortgage in America, backed by Fannie Mae and Freddie Mac. Our wholesale lenders underwrite strictly to their guidelines - not a stricter in-house version of them. Guided locally by Coltrain Mortgage.

Get Pre-Qualified See My Down Payment Options

3%

Minimum down payment

620

Commonly cited minimum credit score*

$832,750

2026 conforming loan limit, most areas

Why conventional works

3%

down payment can qualify eligible first-time buyers - and PMI drops off once you reach 20% equity, unlike government-loan mortgage insurance.

The Basics

What makes a conventional loan different

1

Low down payment

As little as 3% down for eligible first-time buyers, with programs like HomeReady® and Home Possible®.

2

PMI that goes away

Unlike FHA mortgage insurance, conventional PMI can be cancelled once you reach 20% equity - and drops automatically at 78%.

3

Fixed & adjustable options

Choose the term and rate structure that fits your plans - 15, 20, or 30-year fixed, or an ARM.

4

No lender overlays

Our wholesale lenders underwrite to Fannie Mae & Freddie Mac's actual guidelines - not a stricter in-house standard.

Wondering what you'd qualify for?

Get Pre-Qualified Call (631) 851-4420

Our Advantage

We lend by the book - Fannie Mae & Freddie Mac's book.

Fannie Mae and Freddie Mac set the actual underwriting guidelines for conventional loans - things like minimum credit score, debt-to-income ratio, and down payment. Many lenders quietly add their own stricter rules on top, called overlays, simply to reduce their own risk. When a lender tells you "our program requires a 680," that's often their overlay talking, not the real guideline.

Our wholesale lenders underwrite strictly to Fannie Mae and Freddie Mac guidelines, with no overlays layered on top - so you get access to the full guideline, not a watered-down version of it.

Guidelines and loan limits are set by Fannie Mae, Freddie Mac, and the FHFA and are subject to change - ask your Coltrain loan officer for current details.

Try It Yourself

Estimate your payment, down payment & PMI

Adjust the home price, down payment, and interest rate to see an estimated monthly principal & interest payment and whether PMI would apply - a quick way to understand your options before you talk numbers with a loan officer.

Estimated purchase price

$

Down payment

Interest rate - 6.500%

0%8%

Est. monthly principal & interest

$2,401

Down payment$25,000

Loan amount$475,000

Loan-to-value (LTV)95%

PMI required

Est. monthly PMI$198–$495

Est. total monthly (P&I + PMI)$2,599–$2,896

At 95% LTV, PMI is required until you reach 20% equity - it can then be cancelled by request, or terminates automatically at 78% LTV by federal law.

Assumes a 30-year fixed loan. P&I only - excludes property taxes, homeowners insurance, and HOA dues. PMI is estimated using a typical 0.5%–1.25% annual rate range; your actual rate and PMI depend on credit, LTV, and loan program.

Is Conventional Right For You?

Who conventional loans are for

First-Time Buyers

Low down payment programs

HomeReady® and Home Possible® allow as little as 3% down for eligible first-time and moderate-income buyers.

Strong Credit

Move-up & repeat buyers

Borrowers with solid credit and steady income often get the most competitive rates with conventional financing.

Second Homes

Vacation & second properties

Conventional guidelines directly support second-home financing, unlike government-backed primary-residence-only programs.

Investors

Investment properties

Financing for one-unit investment properties is available, typically up to 85% loan-to-value.

Skip Lifetime MIP

Buyers who plan to build equity

Conventional PMI cancels once you reach 20% equity - FHA mortgage insurance often lasts for the life of the loan.

Higher Loan Amounts

Buyers near or above FHA limits

Conforming loan limits reach $832,750 in most areas for 2026, with higher limits in high-cost markets.

How It Works

From pre-qualification to closing

1

Get pre-qualified

A quick conversation tells you what you qualify for before you start touring homes.

2

Find your home

Shop with confidence knowing your real, no-overlay guideline eligibility.

3

We handle underwriting

Your loan officer manages documentation and keeps you updated at every step.

4

Close on your terms

Sign, get your keys, and start building equity toward PMI removal.

Why It Matters

An overlay can turn a "yes" into a "no."

Two lenders can look at the exact same Fannie Mae or Freddie Mac guideline and reach different answers - because one added stricter rules of its own. By underwriting strictly to agency guidelines with no overlays, our wholesale lenders give your file the full benefit of what Fannie Mae and Freddie Mac actually allow.

“We don't add rules on top of the guideline - we lend to the guideline.”

- Coltrain Mortgage, Licensed Loan Originators

Free Consultation

Talk to a local loan officer

Tell us a little about what you're looking to do and a Coltrain loan officer will personally reach out - usually within one business day.

No obligation, no pressure
Local Long Island loan officers, not a call center
Real answers on rate, down payment, and PMI for your situation

Get Your Free Consultation

Step 1 of 4

What's your name?

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Best email address?

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Best phone number?

Step 4 of 4

What are you looking to do?

No obligation. A local Coltrain loan officer will reach out directly.

Thanks - you're all set.

A Coltrain loan officer will personally reach out shortly. Have a question right now? Call (631) 851-4420.

Common Questions

Conventional loans, answered

What are Fannie Mae and Freddie Mac??

They're government-sponsored entities that buy conventional loans from lenders and set the underwriting guidelines those loans must meet - things like minimum credit score, down payment, and debt-to-income ratio.

What does "no overlays" actually mean??

An overlay is an extra requirement a lender adds on top of Fannie Mae or Freddie Mac's actual guideline, usually to reduce the lender's own risk - like requiring a higher credit score than the guideline calls for. Our wholesale lenders underwrite strictly to the agency guideline, without adding their own stricter rules on top.

How much down payment do I need??

As little as 3% for eligible first-time buyers under programs like HomeReady® or Home Possible®; 5% or more is typical for other buyers. Down payments under 20% require PMI.

When can I remove PMI??

You can request PMI cancellation once you reach 20% equity, and it terminates automatically at 78% loan-to-value under federal law - unlike FHA mortgage insurance, which often lasts for the life of the loan.

What's the conforming loan limit for 2026??

The FHFA baseline conforming loan limit for 2026 is $832,750 for most areas, with higher limits up to $1,249,125 in certain high-cost markets. Your Coltrain loan officer can confirm the limit for your specific property.

Explore More

Other loan programs on Long Island

Ready When You Are

Let's find out what you qualify for.

No pressure, no obligation - just a clear answer from a local loan officer.

Get Pre-Qualified Call Coltrain Mortgage