A conventional uninsured loan is a mortgage that does not have private mortgage insurance, explains Homestead Funding Corp. Private mortgage insurance is usually required on mortgages of more than 80 percent of the value of the property.
According to FinWeb.com, conventional loans usually require a borrower to put down relatively large down payments. If borrowers do not have a lot of cash on hand for a down payment, some lenders may finance the closing costs on a loan by charging the borrower with a higher interest rate. Conventional loans also charge origination fees and costs that vary from one lender to another.