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FHA vs Conventional Loan: Which Is Better for You?
Compare FHA and conventional mortgages on down payment, PMI, credit requirements, and total cost.
July 9, 20267 min readBy MyWealthForge
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Key Takeaways
- 1FHA: 3.5% down, 580+ credit, MIP often for life of loan.
- 2Conventional: 3% down with good credit, PMI removable at 20% equity.
- 3FHA better for lower credit; conventional better for strong credit + 5%+ down.
- 4Compare total cost including mortgage insurance.
FHA and conventional are the two most common loan types. The right choice depends on credit score, down payment, and how long you will keep the loan.
Use our loan comparison calculator.
FHA Loan Pros and Cons
Pros: low down payment, flexible credit. Cons: upfront + monthly MIP, often cannot be removed.
Read PMI guide.
Conventional Loan Pros and Cons
Pros: PMI drops at 20% equity, no upfront fee. Cons: stricter credit and DTI requirements.
Need 620+ credit — see credit score for mortgage.
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