The basic difference
An FHA loan is backed by the government. That backing lets lenders offer flexible credit and low down payments.
A conventional loan is not government backed. It usually wants stronger credit, but it can cost less over time.
Credit and down payment
- ›FHA. Works with lower credit scores and as little as 3.5% down.
- ›Conventional. Rewards higher credit and can start around 3% to 5% down.
- ›More down usually means a lower payment and less insurance cost.
The PMI factor
Here is what most people miss. FHA mortgage insurance often lasts the life of the loan. Conventional PMI drops off once you reach 20% equity.
So a conventional loan can cost less over time, even when the monthly payment looks similar up front.
How to choose
We run the numbers both ways using your real credit, savings, and goals. Then you see the true cost of each and pick the one that fits your life.
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