FHA vs Conventional Loans: Which One Should You Pick?

Trying to decide between an FHA loan and a conventional mortgage? This video breaks down the key differences so you can make the best decision for your homebuying goals. FHA loans are backed by the government and are known for flexible guidelines—perfect for first-time buyers, lower credit scores, or higher debt-to-income ratios. They require just 3.5% down and offer leniency with job history, credit challenges, and income. Conventional loans, on the other hand, offer as little as 3% down and are ideal for buyers with stronger credit and more financial stability. They come with lower long-term costs, especially if you plan to put down 5-10%, and allow mortgage insurance to be canceled once you reach 20% equity. We’ll compare interest rates, credit score requirements, down payment options, DTI limits, loan limits for 2025, mortgage insurance costs, appraisal flexibility, and how each loan type affects your offer’s strength in a competitive market.

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0:00 Intro
0:16 Key features of FHA loans
0:50 Key features of conventional loans
1:07 Fast facts - FHA vs conventional
1:30 FHA - better if you have lower credit scores
1:42 3% down vs 3.5% down
1:54 3% down conventional loan gotchas
2:30 How FHA loans can be more expensive
3:15 FHA - better if you have high debt
3:46 Income and work history needed
3:57 Conventional loans better for larger loans
4:16 Conventional loans better for poor property conditions
4:34 Occupancy requirements
4:51 Sellers may prefer a conventional loan offer
5:20 Recap
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For more information on FHA and Conventional loans, and other home buying programs, visit MortgageResearch.com https://www.mortgageresearch.com/arti...

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