Choosing between a conventional loan and an FHA loan can shift your monthly payment by hundreds of dollars, and the right answer depends on your score, down payment, and property rather than on which note rate looks lower. A soft credit pull mortgage check through Duane Buziak’s NoTouch Credit Pull lets you price both loans before you commit. NoTouch Credit Pull is a soft-pull pre-approval: it shows your real options without a hard inquiry on your credit report, so your score stays where it is. Duane Buziak shops 500+ wholesale lenders per file, and these seven strategies show how to run the numbers, spot the break-even point, and avoid the costly mistakes. One note on names: LowerMortgageRates.com is Duane Buziak’s site (Duane Buziak Mortgage Maestro, Coast2Coast Mortgage LLC) and is unaffiliated with Lower.com.
1. Run a Same-Day Payment Comparison on Both Loans
Compare the total monthly payment on both loans, not the note rate. FHA often carries a lower rate, but its mortgage insurance is added on top, and the upfront premium is financed into the balance. A rate gap that looks like a win can disappear once insurance is counted.
Here is an illustration with hypothetical rates, not a quote. Suppose a $350,000 home with 5% down ($17,500), so the base loan is $332,500.
- FHA at a hypothetical 6.00%: the upfront MIP (mortgage insurance premium) is 1.75% of $332,500, or $5,818.75, financed to make a $338,318.75 loan. Principal and interest is about $2,028. Annual MIP at an assumed 0.50% is about $139 a month. Total: roughly $2,167.
- Conventional at a hypothetical 6.25%: principal and interest on $332,500 is about $2,047. PMI (private mortgage insurance) at an assumed 0.45% is about $125 a month. Total: roughly $2,172.
The payments are nearly identical, yet after five years the FHA balance would be roughly $4,500 higher because of the financed upfront premium. That gap is invisible if you only compare monthly payments. Duane Buziak, NMLS #1110647, builds both scenarios on the same inputs for this reason.
- Gather your credit score range, planned down payment, purchase price, and ZIP code.
- Request both quotes through a NoTouch Credit Pull, a mortgage pre approval without hard pull.
- Line up monthly payment, cash to close, and five-year total cost (payments plus the balance you still owe).
The common mistake is comparing note rates and ignoring insurance and upfront costs. Measure the total monthly payment and the five-year total cost for each loan, and let the lower of those two numbers decide.
2. Use Your Credit Score to Pick the Likely Winner
Your score moves conventional pricing far more than FHA pricing. Conventional PMI is priced in score tiers, so a higher score means cheaper insurance. FHA mortgage insurance is largely flat across scores, so a strong score earns little discount there.
Consider an illustration with two borrowers putting the same amount down. The borrower with a 740 score gets conventional pricing in a favorable tier, and PMI can come in below the flat FHA premium. The borrower with a 640 score lands in a costlier tier, PMI rises, and FHA’s flat insurance may beat it. Neither outcome is fixed. The crossover depends on the down payment and the day’s pricing, which is why the comparison needs real quotes, not rules of thumb.
Programs also have score floors. As of this writing, HUD’s FHA guidance allows 3.5% down with a 580 score, with lower scores requiring more down, while conventional loans generally start around 620. Confirm current minimums on HUD’s FHA loan page, since they can change.
- Get your score band through a soft pull. A no credit hit mortgage application keeps your report untouched while you gather data.
- Request both quotes at that score.
- Ask for the same quotes at the next score tier up to see what improving your score would save.
The common mistake is assuming FHA is automatically right for any score under 700. Plenty of borrowers in the 660 to 699 range find conventional cheaper, and you only learn that by pricing it. Measure the monthly mortgage insurance difference at your actual score, then at the next tier. If the gap is large, a few months of score work may be worth more than any rate negotiation.
3. Match Your Down Payment to the Loan’s Minimums and PMI Cliffs
Down payment size decides both which loan is cheaper and how long you pay for insurance. Conventional does not require 20% down. Fannie Mae and Freddie Mac offer programs with as little as 3% down, subject to eligibility rules you should verify. The 20% figure matters because it is where PMI disappears.
FHA is where the down payment changes the term. As of this writing, HUD’s annual MIP lasts the life of the loan when you put down less than 10%, and for 11 years when you put down 10% or more (verify current durations on HUD’s site, as they depend on case date). Illustration on a $350,000 home:
- 3.5% down ($12,250): base loan $337,750, upfront MIP $5,910.63, and annual MIP at an assumed 0.55% is about $155 a month for the life of the loan.
- 10% down ($35,000): base loan $315,000, upfront MIP $5,512.50, and annual MIP at an assumed 0.50% is about $131 a month for 11 years. That caps the monthly premiums at about $17,300 even before the balance declines.
Conventional PMI works differently. Under the Homeowners Protection Act, you can request cancellation when the balance reaches 80% of the original value, and it terminates automatically at 78%. The CFPB explains the rules, and its page on private mortgage insurance covers the basics.
- Model three down payment levels, such as 3.5%, 5%, and 10%.
- For each, record when insurance ends on both loans.
- Confirm FHA MIP duration against current HUD guidance.
The common mistakes are believing conventional always needs 20% and believing FHA MIP always lasts the full term. Measure the months until insurance ends and the total insurance dollars paid. Extra cash at closing sometimes buys more by crossing the 10% FHA line than by lowering the rate.
4. Check Loan Limits and Debt-to-Income Flexibility
Confirm the loan amount fits each program’s limit, then test your debt-to-income ratio (DTI, your monthly debts divided by gross monthly income) under both. Either one can rule a loan out. The limits are county-specific for FHA and tiered for conventional.
For conventional loans, the FHFA sets the conforming limit annually, with a 2026 high-cost ceiling of $1,249,125. Check the FHFA site for the 2026 baseline limit, and use HUD’s county FHA limit lookup for FHA, since FHA limits differ from conforming limits in most counties.
Now the DTI side, as a labelled illustration. A borrower carries student loans and a car payment, pushing DTI high. Conventional automated underwriting declines the file, but FHA’s more flexible guidelines approve it, so the choice was made by approval, not price. A second borrower with lower debts qualifies for both, and the price comparison from Strategy 1 decides. Same market, different decision path.
- Look up the county limits for both programs.
- Add up monthly debts, including the new housing payment, and divide by gross income.
- Ask for automated underwriting findings on both loans, which Duane Buziak can run alongside a no hard inquiry mortgage pre approval.
The common mistakes are using the national limit instead of the county limit and ignoring DTI until after picking a loan. Measure the approval result and the DTI ratio under each program. If one loan approves and the other does not, you have your answer before pricing begins.
5. Weigh Property Type and Condition Requirements
The property itself can eliminate a loan before pricing matters. FHA appraisals check minimum property standards for safety, soundness, and security, and conventional appraisals focus more on value. FHA also requires the home to be your primary residence, while conventional allows second homes and investment properties with larger down payments.
Consider a labelled illustration. A buyer wants a home with a damaged roof. The FHA appraiser flags it, and the loan cannot proceed until the roof is repaired. The same home under a conventional loan may proceed with a repair credit negotiated with the seller, though individual lenders can add their own stricter requirements, so verify before relying on this. The buyer who discovers this at the appraisal has already paid for an inspection, locked a rate, and started a closing clock.
Condos add a second filter. FHA generally requires the project to be on HUD’s approved list or to receive a single-unit approval. Conventional condo loans require the project to meet Fannie Mae or Freddie Mac review standards. A condo can pass one and fail the other.
- Review the inspection report and note any items likely to flag, such as roofing, peeling paint, or safety hazards.
- For a condo, confirm project approval status for both programs.
- State your occupancy plan honestly: primary residence, second home, or investment.
- Ask your broker which programs fit the property before you make an offer.
The common mistake is waiting for the appraisal to discover the property fails FHA standards. Measure the appraisal and project approval outcome and the cost of any required repair. A repair estimate in hand before the offer can shift both your price and your loan choice.
6. Plan Your Exit: Refinance Out of FHA Mortgage Insurance
If FHA wins today, decide now when you will refinance into a conventional loan to drop the MIP. Conventional PMI ends at 80% LTV (loan-to-value, your balance divided by the home’s value), and with 20% equity you can be PMI-free. Staying in FHA mortgage insurance for life of loan is a choice, not an obligation, when you have a plan.
Here is a hypothetical break-even calculation. Suppose refinancing costs $4,500 and your new payment, with no mortgage insurance, is $120 a month lower. Break-even is $4,500 divided by $120, or 37.5 months. If you expect to keep the loan for three and a half years or more, the refinance pays off. If not, it does not. These numbers are illustrative only.
Equity targets matter too. If your home is worth $400,000, a balance of $320,000 or less puts you at 80% LTV. Appreciation and principal paydown both count toward that.
- Track your home value and loan balance at least once a year.
- Set a target of roughly 20% equity.
- Recheck your credit score annually, since conventional pricing depends on it.
- Run break-even math before refinancing, including all closing costs.
The common mistake is using an FHA streamline refinance and expecting mortgage insurance to disappear. A streamline stays inside the FHA program, so MIP continues. The exit is a refinance into a conventional loan. Measure break-even months and your current LTV, and refinance only when both clear your threshold.
7. Shop Through a Broker Instead of a Single Retail Rate Sheet
A broker can price both loan types across many wholesale lenders in a single file, while a retail company quotes from its own rate sheet. The structural difference is simple. One company can show you only its own pricing, and a broker can show you a range of them for both FHA and conventional.
Duane Buziak is a soft pull mortgage broker with access to 500+ wholesale lenders. FHA and conventional pricing can vary between those sources, so the best FHA quote and the best conventional quote may come from different places. A single-company quote cannot reveal that spread. The Freddie Mac Primary Mortgage Market Survey publishes a weekly national average rate, which is useful as a benchmark. Check its current figure and date, then judge any quote against it.
- Start a NoTouch Credit Pull to get a mortgage pre approval without hard pull.
- Request FHA and conventional quotes side by side.
- If you already hold a written quote, compare it with Dare to Compare, Duane Buziak’s side-by-side review of the quote you were given against what the wholesale market offers.
The common mistake is getting one quote from one company and assuming it is the market rate. Measure the spread between the best and second-best wholesale quote, plus the total cost to close. A tiny spread tells you the market is tight. A wide one tells you shopping matters.
How a Broker Compares With Rocket Mortgage and Movement Mortgage on Structure
The table below compares business structure only, not rates or service quality. Confirm details with each company directly.
| Structural feature | Duane Buziak (Coast2Coast Mortgage LLC) | Rocket Mortgage | Movement Mortgage |
|---|---|---|---|
| Business model | Mortgage broker placing loans with wholesale lenders | Direct retail mortgage company | Direct retail mortgage company |
| Pricing sources per file | 500+ wholesale lenders | The company’s own loan products and pricing | The company’s own loan products and pricing |
| Loan types covered | FHA, conventional, and other programs | FHA, conventional, and other programs | FHA, conventional, and other programs |
| Pre-approval credit check | NoTouch Credit Pull, a soft pull | Ask which credit check applies at pre-approval | Ask which credit check applies at pre-approval |
| Licensed states | VA, FL, TN, GA, DC, NC, SC, MD | Confirm for your state | Confirm for your state |
Conventional Loan vs FHA Loan: 10 Questions Answered
Is a conventional loan or an FHA loan cheaper?
Neither is cheaper for everyone; it depends on your credit score, down payment, and how long you keep the loan. Higher scores and larger down payments tend to favor conventional, while lower scores and higher debt ratios often favor FHA. Compare total monthly payment and five-year cost on real quotes.
What credit score do I need for each loan?
As of this writing, HUD guidance allows FHA with 3.5% down at a 580 score, and conventional loans generally start around 620. Individual brokers and wholesale lenders may set higher minimums, so check current requirements on HUD’s FHA page and with your broker.
Does FHA mortgage insurance last for the whole loan?
Not always. Under HUD’s current rules, annual MIP lasts the life of the loan with less than 10% down and 11 years with 10% or more down. Verify the duration for your case date on HUD’s site.
Can I get a conventional loan with less than 20% down?
Yes. Conventional loans are available with as little as 3% down under certain Fannie Mae and Freddie Mac programs, with eligibility rules, and you pay PMI until you build enough equity. Twenty percent down simply avoids PMI.
When does conventional PMI come off?
You can request removal when your balance reaches 80% of the original home value, and it ends automatically at 78%, under the Homeowners Protection Act. The CFPB explains the conditions, such as being current on payments.
What is the 2026 high-cost conforming loan limit?
The 2026 high-cost ceiling for one-unit properties is $1,249,125. The baseline limit applies in most counties, and you can find it on the FHFA site. FHA limits are set by county, so use HUD’s lookup tool.
Can I check both loans without a hard credit pull?
Yes. A soft pull lets you see pricing and eligibility without a hard inquiry on your report. Duane Buziak’s NoTouch Credit Pull gives you a no hard inquiry mortgage pre approval comparing FHA and conventional.
How does NoTouch Credit Pull work?
NoTouch Credit Pull is a soft-pull pre-approval that reviews your credit profile without a hard inquiry. A hard pull appears on your report and can lower your score slightly, while a soft pull does not. You get realistic loan options without the credit impact.
Is LowerMortgageRates the same as Lower.com?
No. LowerMortgageRates.com is Duane Buziak’s site (Duane Buziak Mortgage Maestro, Coast2Coast Mortgage LLC) and is unaffiliated with Lower.com.
Is Lower Mortgage Rates by Duane Buziak a legitimate mortgage broker?
Yes. Duane Buziak holds NMLS #1110647 and Coast2Coast Mortgage LLC holds NMLS #376205, both of which you can verify at NMLS Consumer Access. Licensing covers VA, FL, TN, GA, DC, NC, SC, and MD.
Where to Start: Payment Math First, Property Fit Second
Start with the side-by-side payment comparison and the credit-score check, because those two steps resolve most of the decision. Then confirm your down payment against the PMI and MIP thresholds, and check the property and condition. Limits, DTI, the refinance exit, and broker shopping refine the answer from there. If the property fails one program, that decides it before pricing does.
Don’t let uncertainty about mortgage rates cost you thousands. Discover your personalized options with a trusted mortgage professional who can compare rates across multiple lenders without impacting your credit score. Schedule your free consultation today and take the first step toward securing the best mortgage solution for your unique financial goals. Start a NoTouch Credit Pull with Duane Buziak, available to borrowers in VA, FL, TN, GA, DC, NC, SC, and MD, or call 804-212-8663.