A conventional loan lets you buy with as little as 3% down, skips the upfront mortgage-insurance fee FHA charges, and — the part nobody explains — its PMI cancels automatically once you've built 20% equity. It's the loan most buyers end up cheaper on long-term. Beto shops 100+ lenders to find your best version of it — for free.
The 20% figure isn't a rule — it's just the point where you skip mortgage insurance. You can buy long before that, and on a conventional loan the insurance isn't permanent anyway.
This is FHA thinking applied to the wrong loan. On a low-down FHA loan, the mortgage insurance really does stick around for the life of the loan. So people assume every loan works that way — and keep renting while they try to save a number they don't actually need.
Put down what you can, buy now, and your PMI automatically cancels once your balance reaches 78% of the original value. You can even request removal at 80%. No refinance, no fee, no forever. You get the home and the lower long-term cost.
It's the default loan for a reason. Three things set it apart — and they compound over the years you own the home.
FHA charges 1.75% of the loan amount upfront just to get the loan — rolled into your balance, so you pay interest on it for years. Conventional has no upfront mortgage-insurance fee at all.
~$5,250 saved on a $300k loanThis is the big one. Conventional PMI is temporary — it falls off automatically as you pay down or your home appreciates. On FHA, that monthly insurance is usually permanent until you refinance out.
Falls off at 78% LTV3% down for first-timers, more options for move-up buyers, primary homes, second homes, and even rentals. Strong credit gets you better pricing and lower PMI than FHA at the same down payment.
First-time & repeat buyersPrivate mortgage insurance protects the lender when you put down less than 20%. The thing to understand: on a conventional loan it's temporary. Here's the same buyer's path on each loan type.
You start with PMI, pay it down, and it disappears — no refinance, no fee.
FHA's insurance (MIP) generally stays for the life of the loan when you put down less than 10%.
FHA still wins for some buyers — lower credit, higher debt ratios, certain situations. The point isn't that one is always better. It's that if you qualify for conventional, the math usually favors it. Beto runs both side by side on your real numbers.
The two loans most buyers choose between. General guidelines below — your exact terms depend on credit, the lender, and the property.
If any of these sound like you, conventional is worth running first. Not sure? That's the whole point of the call.
You've got a 620+ score and a little saved. The 3% conventional option gets you in without the upfront FHA fee — and the PMI won't follow you forever.
Selling and buying again? Equity from your current home plus a conventional loan usually beats FHA on rate and insurance — especially with strong credit.
Already in an FHA loan and sitting on 20%+ equity? Refinancing into conventional can drop the mortgage insurance entirely. Worth a five-minute look.
Because conventional PMI cancels based on value, rising home prices can knock it off sooner — sometimes years earlier than the payment schedule alone would.
Alberto Moravia — known as Beto the Broker — is a licensed mortgage broker, TREC Certified Instructor, and proud San Antonio, TX resident who genuinely likes helping people figure out the right loan, not just a loan.
As an independent broker at Edge Home Finance LLC, Alberto shops across 100+ wholesale lenders to compare conventional, FHA, and everything in between — then shows you the side-by-side so you can see why one wins for your situation. He'll tell you straight whether the numbers work, and he speaks English, Spanish, and Portuguese.
A free 10-minute call with Beto. He'll run both loans side by side — down payment, PMI, monthly payment, and what it costs you over time — so you pick the one that's actually cheaper for you.