Credit and qualifying
FHA guidelines are more forgiving on credit history and debt-to-income ratio, which is why it is common for first-time buyers. Conventional underwriting rewards higher scores with better pricing and lower mortgage insurance costs.
Mortgage insurance is the deciding factor for many buyers
On most FHA loans, the annual mortgage insurance premium stays for the life of the loan. Conventional private mortgage insurance can typically be removed once you reach enough equity and meet servicer requirements.
Over a long ownership period, that difference can outweigh a small rate advantage.
Property condition matters Downriver
FHA appraisals apply minimum property standards. On a century-old Wyandotte or Lincoln Park home, that can mean required repairs before closing. Conventional appraisals are generally less prescriptive.
How to decide
Run both. A loan officer can produce side-by-side estimates showing the payment, the cash to close and the long-term cost of each, using your actual credit and the actual property.
This article is general educational information, not financial, legal or tax advice, and it is not a commitment to lend. Program guidelines and availability change. Talk to a licensed loan officer about your specific situation.