What is an example of a primary advantage of conventional loans?

A primary advantage of conventional loans is that they typically do not require private mortgage insurance (PMI) if the borrower makes a down payment of at least 20%. This is significant because PMI can add to the monthly payment and increase the overall cost of borrowing. By avoiding this additional expense, borrowers can save money and manage their budgets more effectively.

The other options, while they may present certain benefits, do not represent the primary characteristic that sets conventional loans apart. For instance, fixed low interest rates can be found in many types of loans, not just conventional ones. High loan-to-value ratios are generally associated with higher risk loans, and while some conventional loans may accommodate them, they are not a defining feature. Lastly, no closing costs are not typically associated with conventional loans, as most lenders do charge for closing costs, which can include appraisal fees, title searches, and origination fees. Thus, the absence of an insurance requirement is a notable advantage that distinguishes conventional loans in the mortgage market.