Conventional Loan vs FHA Loan: Which is better?

Buying a house is complicated for a first-time buyer, because there are so many papers and legal works required. One way to minimize the stress is to get a loan pre-approval that you can hang onto while you shop for the perfect house.

But which type of loan should you try to acquire? The first decision to make is whether to look for an FHA(Federal Housing Administration) mortgage loan or a conventional mortgage loan. There is no perfect choice for all home buyers — which one is right for you depend upon your specific circumstances.

A conventional loan and an FHA loan can both be great tools when you are in the market for a house. FHA loans can be a great source of savings for you as well as offering several other benefits. A conventional loan also has its advantages. The decision of whether to use an FHA loan or a conventional loan can sometimes be difficult. Here are a few benefits of Conventional Loan and FHA Loan.

Conventional Loan Benefits:

One of the biggest pluses of conventional loan is that they carry low interest rates, and because a federal agency is not involved, the approval process can be a little faster. Another big advantage of conventional loans is that they often do not come with the amount of stipulations that FHA loans do. For example, with FHA loans, if you refinance or sell your house, you will lose all of the money that you saved by going into it in the first place. Through prepayment penalties and other costs, it may actually cost you more. The rules and regulations are far less strict with conventional loans in many cases. In short, we can write the following major benefits of Conventional Loan:

✔ No Mortgage insurance requirement
✔ Can be used on all property types
✔ More loan program options
✔ Can hold numerous conventional loans
✔ Maximum loan limit
✔ 3% Down payment
✔ No gift funds all allowed
✔ No upfront MIP
✔ Monthly MIP
✔ Lower monthly payment
✔ Less cash to close


If you are a first time house buyer and don’t want to ruin yourself into paper works, you should probably pursue Conventional Loan. Such loans gives you more freedom, low interest rate, fast process and complete flexibility. Buyers who can afford a conventional loan enjoy more freedom and less paperwork for Great deals on Conventional loans get in touch with us.

To learn more about our financing solutions for residential and commercial properties, please call us at (310) 734–4044 or visit us at

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