FHA vs. Conventional Loans: Which Is Right for You?

Understanding the Difference

Two of the most popular mortgage options are FHA and conventional loans. Both can get you into a home, but they work differently.

FHA Loans

FHA loans are insured by the Federal Housing Administration. They're designed for borrowers with lower credit scores (as low as 580) and smaller down payments (3.5%). The trade-off is mandatory mortgage insurance for the life of the loan.

Conventional Loans

Conventional loans aren't government-backed, which means stricter credit requirements (typically 620+) but more flexibility. With 20% down, you avoid private mortgage insurance entirely. Even with less down, PMI can be removed once you reach 20% equity.

Which Should You Choose?

Choose FHA if you have a lower credit score or limited savings for a down payment. Choose conventional if you have strong credit and can put more money down. Your Beacon Mortgage loan officer can run both scenarios to show you the real numbers.

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