The right program depends on your finances and your plans. Ask for comparable estimates before deciding.
An FHA loan is made by a lender and insured by the Federal Housing Administration. A conventional loan is outside that government insurance program. Both can finance a home purchase, but the way you qualify and pay for mortgage insurance can differ.
The differences to discuss.
FHA
Flexible qualification. Insurance to account for.
- FHA can allow a down payment as low as 3.5% for eligible borrowers. Credit and lender requirements still apply.
- Its credit requirements can be more flexible than many conventional programs.
- Mortgage insurance includes an upfront premium and an ongoing premium. Include both when comparing costs.
- The applicable loan limit depends on the county. Confirm the limit for the property before relying on a purchase budget.
CONVENTIONAL
Review the pricing and insurance together.
- A conventional loan is not automatically a 20%-down loan. Ask which lower-down-payment options you qualify for.
- Pricing and eligibility depend on the program and your financial profile.
- Private mortgage insurance is typically required with a down payment below 20%. Its cost can vary with credit and down payment.
- PMI can be canceled under certain conditions. Confirm the applicable rules and timeline rather than assuming it disappears on a particular date.
These are general program differences, not an offer of financing or a determination that you qualify. Lender requirements and property eligibility also apply.
Compare the same home and your actual timeline.
Start with the same purchase price, expected closing date and comfortable monthly budget. Then separate three decisions:
- Cash available after closing. Consider the down payment, costs paid upfront, prepaid items and reserves. Keep your move, repairs and other goals in the budget.
- Monthly housing expense. Add mortgage insurance to principal and interest. Use consistent estimates for taxes, homeowners insurance and HOA dues.
- Cost over the years you expect to keep the loan. Compare interest, insurance, upfront charges and any fees added to the balance. Also look at what you will still owe.
A lower rate does not settle the comparison if the insurance or other costs differ. Likewise, a smaller upfront expense may come with a larger balance or higher ongoing cost. Ask Jay to explain the tradeoff in dollars at the dates that matter to you.
Try the numbers side by side.
If the base amount borrowed is the same, use the comparison calculator to explore two fixed-rate offers. Enter any financed upfront insurance separately and ask Jay to verify the mortgage-insurance assumptions.
Compare two loan offers →Common questions
Is FHA only for first-time buyers?
No. HUD does not require first-time buyer status for an FHA loan. Discuss your current ownership, plans for the property and eligibility with Jay. Being a repeat buyer does not by itself mean FHA is unavailable.
Which program has the lowest total cost?
There is no universal answer. Request actual offers based on your profile and compare them over your likely holding period. Include the effect of mortgage insurance and any financed costs.
Can I assume I will refinance out of mortgage insurance?
A future refinance depends on future rates, your finances, property value, eligibility and closing costs. Make sure the loan you choose works without relying on a later refinance.
What if my income comes from my business?
Start with the self-employed mortgage guide. Bring your income-documentation questions into the program comparison early.
New to the process? Follow the first-time homebuyer roadmap →
Have military-service eligibility? Explore VA purchase loans →
Educational sources checked October 24, 2026: CFPB: FHA loans, conventional loans, and mortgage insurance. County limits and individual pricing are not quoted here.