Buyers Ask: FHA vs Conventional Mortgage?

FHA and conventional mortgages are two of the most popular types of home loans in the United States. The main difference between the two is that FHA loans are insured by the Federal Housing Administration (FHA), while conventional loans are not. This means that the FHA takes on some of the risk if the borrower defaults on the loan. As a result, FHA loans typically have lower credit score and down payment requirements than conventional loans.

Here is a table that summarizes the key differences between FHA and conventional mortgages:


 FHA Loan

Conventional Loan

Government insured



Credit score requirement

As low as 580

Typically 620 or higher

Down payment requirement

As low as 3.5%

Typically 20%

Mortgage insurance


Optional for down

payments less than 20%

Property types eligible

Primary residences, second homes, and investment properties

Primary residences, vacation homes, and investment



Which type of loan is right for you?

The best type of loan for you will depend on your individual financial situation and needs. If you have a lower credit score or down payment, an FHA loan may be a good option for you. However, if you can qualify for a conventional loan, you may be able to get a lower interest rate and save money on mortgage insurance in the long run.

It's important to compare offers from multiple lenders before choosing a loan. You can use a mortgage calculator to estimate your monthly payments and total costs for different types of loans. The Adam J. Baldwin Team @Compass can give you personalized advice on which type of loan is best for you.



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