FHA vs Conventional: Which Loan Is Right for You?
Dan Ardis compares FHA and conventional loans in 60 seconds. Which one saves you more money depends on your credit score and down payment.
Key Points from This Video
- FHA wins for credit scores below 680
- Conventional PMI cancels at 20% equity; FHA MIP lasts the life of the loan
- 3.5% down with FHA (580+ credit) vs 3% down with conventional (620+ credit)
- Run both scenarios at 680+ credit before deciding
Video Transcript
FHA versus conventional: which one should you use? Here's the quick answer.
If your credit score is below 680, FHA usually wins. The rate difference more than covers the mortgage insurance cost.
If your credit is 680 or above and you have 5% or more down, run the conventional numbers first. FHA mortgage insurance lasts the full 30 years. Conventional PMI cancels at 20% equity.
The other factor is your down payment. FHA allows 3.5% down with a 580 credit score. Conventional allows 3% down but typically wants 620 or better.
My recommendation: if you have a 680 credit score and can put 5% down, compare both. Most borrowers in that range do better on conventional over a 5-year horizon.
Call me or apply online and I will run both scenarios on your specific numbers.
Dan Ardis is a Bakersfield-based mortgage broker with 20+ years in the industry, including experience as a Senior Specialty Underwriter. He originates residential and commercial loans for Kern County clients and in 49 states through Barrett Financial Group.
Questions After Watching?
Dan answers mortgage questions for Bakersfield buyers and investors. Call (661) 342-9381 or get pre-approved online.