What is the difference between FHA and conventional?
Answered by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
FHA allows lower credit (580) and 3.5% down with easier approval, but carries mortgage insurance for the life of the loan. Conventional needs 620-plus and ideally more down, but its PMI is removable at 20% equity.
Lower-credit or lower-down buyers often start with FHA; stronger-credit buyers usually save with conventional. We run both side by side so you see the real monthly and lifetime cost difference.
The core differences
FHA loans are backed by the government and made for buyers with lower credit or smaller down payments. They start at 3.5% down with a 580 score. Conventional loans are not government-backed and usually want a 620-plus score.
FHA charges mortgage insurance for the life of the loan in most cases. Conventional mortgage insurance drops off once you reach 20% equity.
Which fits you
FHA often wins for lower scores or thin credit. Conventional often wins for strong credit because you can cancel mortgage insurance and sometimes get a better rate.
The right choice depends on your numbers. Apply now and we will run both side by side so you see the real monthly cost of each.