A "conventional" mortgage loan is:

• neither guaranteed or insured by the Government

• not limited as to the amount of loan fees that can be charged

• usually long term made at prevailing market rates (15 -30 years)

• usually carries a slightly higher interest rate than FHA or VA

• the most common mortgage loan program in the US for 1-4 family loans 

• either "insured" or "non-insured" by private mortgage insurance (PMI)

Insured Versus Non-Insured

Whether a loan is "insured" or "uninsured" depends on the Loan-to-Value Ratio. 

• The L-T-V Ratio expresses the relationship between the amount of a loan and the appraised value -or-  sale price, whichever is lower. (Formula: Loan Amount/Value = LTV)

A  "noninsured" mortgage is a loan secured by real estate either purchased or financed with at least a 20% downpayment  (equity).  If less than 20% is put down on a purchase or the loan ratio is over 80%, the loan must be "insured". 

An "insured" conventional loan is: 

• over 80% loan-to-value and can be up to 95%
• "insured" by a private mortgage insurance company with the premiums paid by the borrower to protect the lender or subsequent secondary market investors in the event of default
• premium is paid in advance and in monthly payments
• similar to and serves same purpose as FHA insurance and VA guarantee
• originated by a private lender

When a loan is partially repaid, the borrower may request that the insurance coverage be terminated by providing the lender an appraisal.