FHA and conventional loans are the two most common ways to buy a home. Neither is universally better; the right one depends on your credit, down payment, and how long you plan to keep the loan.
Credit and down payment
FHA is more forgiving on credit and allows 3.5% down with a 580 score. Conventional usually wants 620 or higher but allows 3% down for qualified buyers.
Mortgage insurance is the key difference
- Conventional PMI can be removed once you reach 20% equity
- FHA mortgage insurance often stays for the life of the loan
- With strong credit, conventional PMI can be cheaper than FHA insurance
A simple way to decide
If your credit is strong, conventional often wins on long-term cost. If your credit is still improving or your down payment is tight, FHA can be the door that gets you in, with a refinance to conventional later.
We run both side by side, including the monthly payment and the lifetime cost, so the choice is based on real numbers.