Why a Conventional Mortgage Can Put You Ahead in Central Florida

by Bernard Jackson

Central Florida Conventional vs. FHA PMI vs. MIP Equity Growth Offer Strength Poinciana • Kissimmee • Davenport • Winter Haven • Lake Wales

Reading time: about 10 minutes

You are not buying a mortgage. You are buying time, flexibility, and control.

You have worked for strong income, responsible credit, and real savings. When you purchase in Poinciana, Kissimmee, Davenport, Winter Haven, or Lake Wales, your financing should reward that discipline. If you qualify for both FHA and conventional, you deserve to see how a conventional mortgage can reduce your lifetime cost, strengthen your offer, and accelerate your equity.

Quick take

Conventional loans do not charge the FHA upfront mortgage insurance premium (UFMIP) of about 1.75% of the base loan amount. ^[1][2]
With conventional loans, private mortgage insurance (PMI) is typically removable as you reach 20% equity, subject to federal rules and servicer policy. ^[3][7][12]
FHA’s monthly mortgage insurance (MIP) often cannot be canceled for the life of the loan unless specific conditions are met. ^[1][11][16]
Conventional financing can help your offer look cleaner to sellers because property condition hurdles are generally lighter than FHA standards.

Sources are listed at the end of the article. Always verify your numbers with a licensed lender for your exact profile.

Why you might spend less over time with conventional

FHA is valuable for buyers who need wider credit or down payment flexibility. If you have prepared well, conventional rewards you in three ways. First, you avoid FHA’s 1.75% upfront insurance charge that is usually rolled into the loan. Second, PMI on conventional can be canceled once you reach required equity thresholds. Third, you gain flexibility to refinance, retain, or convert use as your life and portfolio evolve.

Conventional

No FHA UFMIP at closing. ^[1][2]
PMI required when you put less than 20% down, but cancellation is available by law when you reach certain equity benchmarks. ^[3][7][12]
Can be used for second homes or investment properties if you qualify. (Program specific)
Common low-down options include 3% programs from Fannie Mae and Freddie Mac for eligible first-time buyers. ^[4][9][14]

FHA

UFMIP is about 1.75% of the base loan amount, usually financed into the loan. ^{[1][2][10][15]}
Annual MIP applies and often cannot be canceled for the life of the loan unless you made at least 10% down and reach 11 years, or you refinance. ^[1][11][16]
Primary residence only. Property must meet stricter condition standards.
Minimum down payment 3.5% with credit 580+, or 10% down with scores 500–579. ^[3][8][13]

Offer strength in Central Florida

In multiple-offer situations, the cleanest approval terms often win. Sellers may prefer the path that reduces appraisal condition risks and extra repair requirements. Conventional financing does not impose FHA’s additional property condition overlays, which means a smoother path to closing on the homes you love in 34758, 34759, Kissimmee, Davenport, Winter Haven, or Lake Wales.

Simple numbers to illustrate lifetime cost

Consider a $350,000 purchase with 5% down. With FHA, you would add UFMIP of about 1.75% of the base loan amount to the balance, then pay annual MIP each month, often for the life of the loan unless you qualify for its limited cancelation rules. With conventional, you would likely pay PMI until you reach 20% equity, then see that monthly cost fall off. That difference can mean thousands saved across the years, especially if you make occasional principal prepayments or benefit from appreciation that gets you to 20% faster.

Side-by-side snapshot

Feature	Conventional	FHA
Minimum down	As low as 3% for eligible first-time buyers (Fannie Mae, Freddie Mac). ^[4][9]	3.5% with 580+ credit; 10% with 500–579 credit. ^[3][8][13]
Upfront insurance at closing	No FHA UFMIP	~1.75% UFMIP, usually financed. ^{[1][2][10][15]}
Monthly insurance	PMI if under 20% down. Removable per federal rules and servicer policy. ^[3][7][12]	Annual MIP. Often not cancelable for life of loan unless specific criteria are met. ^[1][11][16]
Property standards	Standard appraisal and condition	Stricter FHA standards may trigger repairs before closing
Use flexibility	Primary, second home, some investment uses (if qualified)	Primary residence only

Your exact pricing, PMI, and MIP vary by lender, credit, LTV, and program. Confirm with a licensed lender.

How you position yourself to qualify for conventional

Guard your credit. Pay on time, keep utilization low, and avoid new debt before underwriting.
Build targeted reserves. Align your down payment and closing funds with a strategy to reach 20% equity faster.
Lower your DTI. Pay down high-interest balances to free up monthly capacity.
Document income clearly. Two years of history and clean records make approvals smoother.
Ask for 3% conventional options if you are a first-time buyer. See Fannie Mae 97% LTV and Freddie Mac HomeOne for eligibility. ^[4][9][14]
Shop lenders. Compare quotes and fee sheets, and ask for break-even and PMI drop dates in writing.
Use principal prepayments. Even small extra payments can accelerate PMI removal on conventional. ^[3]

Your Central Florida advantage

You live here, work here, and plan to grow here. With conventional financing, you keep more control. You can remove PMI as you build equity. You avoid FHA’s upfront insurance. Your offer looks stronger on homes across Poinciana, Kissimmee, Davenport, Winter Haven, and Lake Wales. Most important, the mortgage serves your goals rather than limiting them.

Next steps I prepared for you

Download: Become a Home Owner in 90 Days Get Pre-Approved Now Schedule Your Consultation Read Client Reviews Still Renting? See Current Rentals

Frequently asked questions

Can I put 3% down with conventional?

Some first-time buyer programs allow 3% down with conventional financing, subject to eligibility and underwriting. ^[4][9][14]

Do I always need PMI with conventional?

Not if you put 20% down. If you put less than 20%, PMI is typical but can be canceled as you hit required equity milestones under the Homeowners Protection Act and servicer policy. ^[3][7][12]

Is FHA cheaper if the interest rate is lower?

A lower rate can help, but FHA adds UFMIP at closing and ongoing MIP. Those charges can outweigh a small rate advantage. Run an apples-to-apples comparison including insurance and fees. ^{[1][2][10][15][16]}

What are FHA’s basic credit and down payment rules?

FHA’s minimum down payment is 3.5% with credit 580+. With 500–579 credit, FHA requires 10% down. Lenders may set higher minimums. ^[3][8][13]

About Bernard Jackson Jr., REALTOR®

I serve buyers across Central Florida with a concierge approach in English and Spanish. When you are ready to compare conventional and FHA side by side, I will coordinate lenders, negotiate your best position, and keep you informed at every step. Call (321) 443-5582 or email bernardjacksonrealtor@gmail.com.

Do you have a question about Central Florida real estate, or is there a topic you’d like me to research for you?

References you can verify

[1] HUD: FHA mortgage insurance structure (UFMIP and annual MIP). :contentReference[oaicite:0]{index=0}
[2] HUD Mortgagee Letter 2023-05: UFMIP 1.75% of base loan amount. :contentReference[oaicite:1]{index=1}
[3] CFPB on canceling private mortgage insurance (PMI) under HPA. :contentReference[oaicite:2]{index=2}
[4] Fannie Mae 97% LTV options (3% down) for eligible first-time buyers. :contentReference[oaicite:3]{index=3}
[7] CFPB HPA guide (PMI cancellation framework). :contentReference[oaicite:4]{index=4}
[8] Rocket Mortgage summary of FHA down payment vs. credit score; consistent with HUD. :contentReference[oaicite:5]{index=5}
[9] Freddie Mac HomeOne 3% down overview. :contentReference[oaicite:6]{index=6}
[10] HUD mortgage insurance premiums page, including cancellation parameters. :contentReference[oaicite:7]{index=7}
[11] Rocket Mortgage FHA MIP removal rules post-2013 (11-year with ≥10% down; otherwise life-of-loan). :contentReference[oaicite:8]{index=8}
[12] CFPB explainer on PMI and 20% down. :contentReference[oaicite:9]{index=9}
[13] NerdWallet FHA guide (credit score and down payment thresholds). :contentReference[oaicite:10]{index=10}
[14] Fannie Mae Eligibility Matrix (conventional requirements, updated 2025). :contentReference[oaicite:11]{index=11}
[15] FHA.com explainer confirming UFMIP 1.75%. :contentReference[oaicite:12]{index=12}
[16] The Mortgage Reports: FHA MIP removal options overview. :contentReference[oaicite:13]{index=13}

GET MORE INFORMATION

Bernard Jackson

+1(321) 443-5582

bernardjacksonrealtor@gmail.com