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Looking for a home loan? Here’s a breakdown of two of the most popular mortgage programs.

Buying a home can be a difficult process, and finding the right mortgage is a huge part of that. It’s important to do your research and work with a loan officer to find out which loan option is the best for your financial situation. Luckily, we’ve done some of your homework for you. Here, we’ll dive into two of the most popular home loan options, FHA vs Conventional, explain their key features, and help you decide which one may be the best loan option for you.


An FHA loan is a mortgage that’s insured by the Federal Housing Administration. The FHA loan program was created to help stimulate the housing market and make loans accessible and affordable for people with spotty credit, which is why it’s so popular among people who are looking to buy their first home. On the other hand, one of the cons of an FHA loan is that all borrowers must pay mortgage insurance premiums, which protect the lender if the borrower defaults. They allow down payments of 3.5% for a credit score of 580 or higher. However, you can still get the loan if your credit score is between 500–579 for 10% down. It’s also important to remember that the lower your credit score, the higher your interest rate will be.

So why might you want to consider an FHA loan?

  • Easier to qualify for.
  • Fixed and adjustable rates are available.
  • You may be able to refinance a Conventional loan into an FHA loan.
  • FHA to FHA streamline refinances do not require an appraisal.
  • Available for cash-out refinance or rate/term refinance.
  • FHA-eligible down payment assistance programs are allowed with a Cardinal Financial-approved program.

All mortgages have specific advantages and disadvantages, and the best option for you may not be the best option for someone else.


A Conventional loan is a mortgage that is not guaranteed or insured by any government agency, which is one of the reasons it’s the most popular mortgage plan amongst people looking to purchase or refinance a home. Borrowers can choose between fixed- and adjustable-rate mortgages with terms from 10 to 30 years. Since they’re not insured or guaranteed by government agencies, Conventional mortgages can be sold to Fannie Mae or Freddie Mac. First-time buyers are allowed to put as little as 3% down, while all other buyers can put as little as 5% down. However, credit standards are a little more strict here than with FHA loans, as you’ll need a credit score of at least 620 to qualify for a Conventional mortgage.

So why should you consider a Conventional loan?

  • Fixed rates offer consistent monthly payments and simplify planning and budgeting.
  • ARMs may have lower initial monthly payments than fixed-rate loans and adjust after the fixed term.
  • Available for purchase, refinance, or cash-out refinance.

The important thing to remember when considering FHA vs Conventional is that there’s no right answer as to which one is “better.” All mortgages have specific advantages and disadvantages, and the best option for you may not be the best option for someone else. Your best bet is to speak with a mortgage expert and go over the pros and cons of each option to see how they fit your financial situation. Happy home-buying!

Did you learn something new from this blog post? Did reading this help you make a decision? We want to know! Tell us on social media!

Article written by KHARI PRESSLEY and reprinted with permission by Cardinal Financial.

Brad Patshkowski

Preparing future home owners is paramount to our customer's success and the success of our industry. The dream of homeownership is closer than you think!