Arizona FHA Loan Or Conventional Loan

FHA loan or conventional loan is the biggest question clients ask.  Alot of clients want to know should I obtain an fha loan or a conventional loan? Well, that depends upon your down payment funds, your fico scores, debt to income, and your reserve requirements. Typically, we are seeing that it is advantageous to obtain an fha loan if your middle fico scores are less than 720. If your middle fico score is over 720, then you are normally better off obtaining a conventional loan.

FHA loans allow for a higher debt to income ratio. Some borrowers have been able to obtain an fha loan with a debt to income ratio as high as 50%. Conventional loans on the other hand typically max out at 43% debt to income ratio. FHA loans allow one to have lower fico scores. Conventional loans require higher fico scores because the borrower has to qualify for mortgage insurance with the mortgage insurance company.

It’s true that the monthly mortgage insurance amount on an fha loan is higher than a conventional loan. However the interest rate on an fha loan is lower than on a conventional loan. That’s why on every single loan we have to figure out whether or not it’s advantageous to obtain an fha or a conventional loan. It all depends upon your loan amount and your fico scores.

FHA loans require a down payment in the amount of 3.5%. Conventional loans only require 3% down payment if you meet the middle fico score requirement.  Normally, you will need a middle fico score of 680 or higher to qualify. If your credit score is less than 680, then you will be required to put more money down on a conventional loan.

For more information call Arizona Wholesale Mortgage Inc. directly at 602-358-8717 or go to our Fha home page at


Watch our little FHA video.


Watch our Conventional video.



Prefer to fill out an online application versus a paper form?  No problem.  We can send you a link to fill out the loan application online.  To start the process call our office at 602-358-8717 and tell us you would like us to email you the link to fill out the online application.  It’s as easy as that.  If you aren’t comfortable filling out an online application, no problem.  We can email you the forms to be filled out, scanned, & sent back to our office.