Question 1

Can I switch from FHA to conventional later?

Accepted Answer

Yes, you can refinance from FHA to conventional once you build 20% equity and meet conventional credit standards. This removes ongoing mortgage insurance and often reduces monthly costs.

Question 2

Which loan type offers better interest rates?

Accepted Answer

Rates vary by borrower profile and market conditions. Conventional loans typically offer lower rates for high-credit borrowers, while FHA rates stay competitive across broader credit ranges.

Question 3

Do both loans work for Hillsborough properties?

Accepted Answer

Both work in Hillsborough, though conventional offers higher loan limits for expensive properties. FHA has county-specific limits that may restrict options in higher-priced areas.

Question 4

How does mortgage insurance compare between the two?

Accepted Answer

Conventional insurance costs less monthly and cancels at 20% equity. FHA requires upfront and monthly premiums that continue for most loan terms, increasing long-term costs.

Question 5

Which requires less money upfront?

Accepted Answer

FHA requires less for down payment at 3.5% minimum. However, the 1.75% upfront insurance premium often gets rolled into the loan amount rather than paid at closing.

Conventional vs FHA Loans in Hillsborough: Which Mortgage Fits Your Needs?