cancel
Showing results for 
Search instead for 
Did you mean: 

FHA or Conventional?

Phoenix10
New Contributor

FHA or Conventional?

I am new to this but i was curious about what is the main differences about these two mortgages?
Other the different requirements and score needed. what is the thing that makes you prefer one or the other if you have a choice to get either one? Thank you.
Message 1 of 12
11 REPLIES 11
Trudy
Valued Contributor

Re: FHA or Conventional?

Credit Score, down payment and PMI requirements are a few things.  Here's a pretty good article comparing.

 

https://www.nerdwallet.com/article/mortgages/fha-loan-vs-conventional-mortgage

 

edit: I see I didn't read your post fully.  For me, not needing to have PMI for my conventional loan is important to me.

 

FICO - 8: 09/09/21 AU 8 BC 8
FICO - 9: 09/09/21 AU 9 BC 9
F5,F4,F2 09/09/21 AU... BC...
Vantage 09/09/21
As of 09/01/21:
AoOA - 25Y6M | AoYA – 0Y10M | AAoA – 12Y4M
Open: 11 CC: (1 reporting 2.84% : 0.25% AGG UTL) | 1 PLOC | 1 MTG loan: 46.89% UTL
Closed: 1 MTG loan | 2 Auto loans | (EQ) 2 CC, (EX & TU) 1 CC
INQ: (EQ) 0/24 | (TU) 1/24 | (EX) 1/24
Message 2 of 12
Phoenix10
New Contributor

Re: FHA or Conventional?

Yes i would not want to pay that pmi either. But lets you give a 20% down payment on a FHA do you still have to pay pmi? I thought once you give that 20% fha or conventional you dont have pmi anymore?
Message 3 of 12
Phoenix10
New Contributor

Re: FHA or Conventional?

Btw thank you for that nice link.
Message 4 of 12
coreyb80
Senior Contributor

Re: FHA or Conventional?


@Phoenix10 wrote:
Yes i would not want to pay that pmi either. But lets you give a 20% down payment on a FHA do you still have to pay pmi? I thought once you give that 20% fha or conventional you dont have pmi anymore?

PMI remains on FHA loan for the life of it while PMI falls off a conventional loan after 20% LTV is achieved.   Someone correct me if I'm wrong please.

Message 5 of 12
Trudy
Valued Contributor

Re: FHA or Conventional?


@coreyb80 wrote:

@Phoenix10 wrote:
Yes i would not want to pay that pmi either. But lets you give a 20% down payment on a FHA do you still have to pay pmi? I thought once you give that 20% fha or conventional you dont have pmi anymore?

PMI remains on FHA loan for the life of it while PMI falls off a conventional loan after 20% LTV is achieved.   Someone correct me if I'm wrong please.


You are correct.  PMI will last the life of the FHA loan.  However, if re-fi'd into a convential then it can be removed with the LTV requirement met. 

FICO - 8: 09/09/21 AU 8 BC 8
FICO - 9: 09/09/21 AU 9 BC 9
F5,F4,F2 09/09/21 AU... BC...
Vantage 09/09/21
As of 09/01/21:
AoOA - 25Y6M | AoYA – 0Y10M | AAoA – 12Y4M
Open: 11 CC: (1 reporting 2.84% : 0.25% AGG UTL) | 1 PLOC | 1 MTG loan: 46.89% UTL
Closed: 1 MTG loan | 2 Auto loans | (EQ) 2 CC, (EX & TU) 1 CC
INQ: (EQ) 0/24 | (TU) 1/24 | (EX) 1/24
Message 6 of 12
VALoanMaster
Valued Contributor

Re: FHA or Conventional?


@coreyb80 wrote:

@Phoenix10 wrote:
Yes i would not want to pay that pmi either. But lets you give a 20% down payment on a FHA do you still have to pay pmi? I thought once you give that 20% fha or conventional you dont have pmi anymore?

PMI remains on FHA loan for the life of it while PMI falls off a conventional loan after 20% LTV is achieved.   Someone correct me if I'm wrong please.


There is 1 exception where the MI on an FHA loan is not for the life of the loan. If you put 10% or more down, the MI drops off in 11 years.

VA Mortgage Expert. Mortgage Banker lending in All 50 States.
VA, FHA, USDA. Jumbo, Conventional.
CAIVRS Expert.
Message 7 of 12
Phoenix10
New Contributor

Re: FHA or Conventional?

I see thank you. I am wondering if FHA can be without pmi if i am willing to put 20% down or more that way i would consider FHA since my score probably will not be so good for conventional. I dont like the idea of getting a FHA and try to refinance later on. I would like to get an FHA with no PMI so i dont need to refinance later on. But not sure if that is even possible.
Message 8 of 12
VALoanMaster
Valued Contributor

Re: FHA or Conventional?


@Phoenix10 wrote:
I see thank you. I am wondering if FHA can be without pmi if i am willing to put 20% down or more that way i would consider FHA since my score probably will not be so good for conventional. I dont like the idea of getting a FHA and try to refinance later on. I would like to get an FHA with no PMI so i dont need to refinance later on. But not sure if that is even possible.

No, that's not possible BUT there are a couple of things you can do to minimize it.

1) Put 10% or more down.

2) Take out a 15 year fixed loan.

By putting 10% or more down you reduce the number of years you have to pay the FHA MI to 11 years & by taking out a 15 year fixed, you reduce the amount from .80% to .45%. On a $300,000 that will save you $87.50 per month on just the MI.

VA Mortgage Expert. Mortgage Banker lending in All 50 States.
VA, FHA, USDA. Jumbo, Conventional.
CAIVRS Expert.
Message 9 of 12
Phoenix10
New Contributor

Re: FHA or Conventional?

Beautiful info! Thank you for your advice. Do you know nowadays what kind of score i am looking for a decent rate with conventional? Im working so so hard to improve my score but i am still at 694 for mortgage fico.
Message 10 of 12
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.