Conventional or FHA?

Here’s an idea of the differences in interest rates, monthly payments, mortgage insurance charges, and down payment requirements for different loan-to-value ratios and FICO scores for you –


  •  Low down payment (3.5 percent minimum)
  • You can go as low as 500 credit (620 minimum for conventional)
  • Not limited to 43 percent for debt-to-income ratio (qualified mortgage rule applies for conventional loans)
  • FHA loans are assumable
  • FHA loans are eligible for “streamline” refinance
  • Shorter timeframe following major credit problems (3 years vs. 7 years for foreclosure and 2 years vs. 4 years for bankruptcy)
  • FHA loans typically will have a lower base interest rate than a comparable conventional loan
  • Non-occupant co-borrower (relative) may be used for qualifying by blending ratios


  •  Low down payment required (3 percent minimum)
  • Mortgage insurance is required for loans exceeding 80 percent loan-to-value (mortgage insurance is required on all FHA loans regardless of the loan-to-value)
  • Conventional mortgage insurance will automatically end at 78 percent loan-to-value (FHA, one premium fits all)
  • Conventional loans can cover much higher loan amounts (FHA over county limits)
  • Even though conventional loans may have higher interest rates, their monthly payments may still be lower


Jolie Powell Realty will connect you with one of our local lenders – 631-473-0420