Honestly, in my experience, it’s more the listing agents than the sellers themselves stirring up concerns about FHA. I’ve sold a handful of properties where buyers had FHA loans, and most sellers didn’t care as long as the offer looked solid and the close was smooth. Agents sometimes hype up the “tougher inspection” angle, but half the time, it’s just standard stuff—peeling paint, loose railings, nothing wild. I wouldn’t stress too much unless you know your local market’s got a real hang-up about it.
FHA vs Conventional—here’s what I ran into when I refinanced last year:
- FHA’s got easier credit requirements and lower down payment, but you’re stuck with mortgage insurance for the long haul unless you refinance out of it. That adds up.
- Conventional can be a little tougher on credit score and down payment, but if you put 20% down, no mortgage insurance. Even with less, you can drop PMI once you hit 20% equity.
- FHA appraisals are definitely pickier about property condition. I had to repaint a few window sills and fix a wobbly handrail—nothing major, but it slowed things down.
- Sellers in my area didn’t care much about FHA vs conventional. It was more about how fast you could close and if your financing looked solid.
If you’re tight on cash or your credit isn’t perfect, FHA’s a decent way in. But if you want to save on insurance and avoid extra hoops down the line, conventional’s worth aiming for. Just depends what you’re working with.
Honestly, I keep going back and forth on this myself. The FHA route looks easier on paper, especially if your credit isn’t all that or you’re scraping together the down payment. But that mortgage insurance hanging around forever just bugs me. It’s like paying rent to the bank even after you’ve got some equity. On the flip side, getting to 20% down for conventional feels impossible for a lot of us first-timers, unless you’ve got help or saved forever. I wish there was a middle ground—like, why can’t they just drop the insurance once you’re less risky? The picky appraisals with FHA are another hassle too... I’d rather not have to repaint stuff just to get approved. Still, if it gets you in the door, maybe it’s worth it?
The picky appraisals with FHA are another hassle too...
That “paying rent to the bank even after you’ve got some equity” bit really hits home. I get why that bugs people. But here’s the thing—FHA isn’t always a forever deal. A lot of folks refinance into a conventional loan once they’ve built up enough equity or their credit improves, and then the mortgage insurance can drop off. It’s not as locked-in as it seems.
On the other hand, you mentioned how tough it is to hit 20% down for conventional. That’s totally real, but there are actually some conventional loans that let you in with as little as 3-5% down. The catch is you’ll still have private mortgage insurance (PMI), but unlike FHA, it usually falls off once you hit that 20% equity mark.
The picky FHA appraisals can be a pain, no argument there. But sometimes those repairs end up saving you headaches later on. Ever see what happens when a roof gets ignored for too long? Not pretty.
It really comes down to which trade-off feels less painful—higher upfront hurdles or longer-term costs. Neither path is perfect, but there are more options than most folks realize.
Has anyone here actually had PMI drop off automatically on a conventional loan? I refinanced out of FHA after a few years, but my buddy went the 5% down conventional route and said his lender made him jump through hoops to get rid of PMI—even after he hit the equity mark. Maybe it depends on the bank, but it wasn’t as automatic as he expected.
Also, about those FHA appraisals—yeah, they’re strict, but honestly, I’d rather deal with a picky inspector than find out six months in that my foundation’s cracked. Still, the upfront costs for repairs can be rough if you’re tight on cash.
Curious if folks think it’s worth starting with FHA just to get in the door, then refinancing later? Or is it better to wait and save up for a bigger down payment to avoid all the extra fees? I went the refi route because I couldn’t wait any longer, but sometimes I wonder if holding out would’ve been smarter.
