Question 1

Which loan has lower mortgage insurance costs?

Accepted Answer

Conventional PMI is typically cheaper if your credit is above 700. FHA MIP costs more long-term because it doesn't cancel on most loans.

Question 2

Can I use gift funds for the down payment?

Accepted Answer

Both programs allow gift funds. FHA is more flexible about the source. Conventional has stricter documentation requirements.

Question 3

What credit score do I need for each loan?

Accepted Answer

Conventional requires 620 minimum. FHA goes down to 580 with 3.5% down, or 500 with 10% down.

Question 4

Is FHA harder to use in a competitive market?

Accepted Answer

Some sellers prefer conventional offers. In Ontario's market, it varies — but FHA is widely accepted and rarely a dealbreaker.

Question 5

Can I switch from FHA to conventional later?

Accepted Answer

Yes. Once you have 20% equity and improved credit, refinancing into conventional removes the lifetime MIP burden.

Conventional vs FHA Loans in Ontario, CA