Is Your Loan Officer Steering You Toward the Wrong Loan?
FHA isn't always the better deal — and most buyers don't find out until it's too late. Here are the two biggest reasons conventional financing is often the smarter choice.
Reason 01
The Upfront Fee Nobody Talks About
Every FHA loan comes with an upfront mortgage insurance premium of 1.75% of the loan amount — that's $7,000 on a $400,000 loan, added directly to your balance. Your loan officer will tell you not to worry about it. But that's $7,000 less equity on day one. Conventional loans don't have this fee.
Reason 02
Mortgage Insurance That Never Goes Away
With FHA and less than 10% down, you're paying mortgage insurance for the entire life of the loan — even after you hit 20% equity. With conventional, mortgage insurance automatically drops off when you reach 20%. The only way out of FHA mortgage insurance is to refinance.
What loan officers won't tell you: FHA often has a lower rate — but when you factor in the upfront fee and permanent mortgage insurance, conventional is frequently the better deal for buyers with decent credit.
I'll compare FHA vs conventional side by side for your specific situation
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Top 1% loan officer licensed in 14 states. I run the real numbers for every borrower — FHA, conventional, VA — so you can make the decision that actually makes sense for your situation.
Nate Moghadam, NMLS #906770 | Fairway Independent Mortgage Corporation, NMLS #2289 | Equal Housing Lender
Licensed in CA, CO, FL, ME, MD, MA, NH, NJ, NC, PA, RI, TN, TX, VA
This content is for informational purposes only and does not constitute financial advice. FHA vs conventional suitability depends on individual credit, income, and financial circumstances. Contact a licensed loan officer to discuss your specific situation. Fairway Independent Mortgage Corporation Disclosures