Conventional financing is the most common method. The "conforming" loans were structured to accommodate those borrowers who can make at least a 20% down payment. Conforming conventional financing has traditionally used a 36% ratio of total debt to gross income as their guideline. However we are seeing that rule of thumb to be less and less important as investors are becoming more sensitive to the borrower's willingness to repay the loan (credit history), ability to repay the loan (income), and willingness to participate in the cash investment (down payment). As a result, we've seen loans approved and funded with a much higher debt ratio!

We can also finance those who have as little as 5% down. It just means that if you put less than 20% down, you'll have to buy mortgage insurance to protect the investor from possible foreclosure expenses.

This traditional, "tried and true" mortgage option is a loan with a constant interest rate and level, equal payments during a set period of time -- most commonly, 30 years. The biggest selling point of fixed-rate loans is predictability, and they are particularly suited to people with steady incomes. If lower rates dictate the time is right to refinance, it's a good idea to compare the costs of incurring a new mortgage -- such as prepayment penalties and loan origination costs. Be sure to compare the costs of incurring a new mortgage -- such as loan origination costs and points. It's also a good idea to ask about prepayment penalties. You may want to refinance your loan or pay it off early to eliminate thousands of dollars in interest.