There is no official reason to choose a conventional home loan over an fha mortgage, but choosing the right one can potentially save you thousands over the term of your loan.  In a nutshell, there are two major determining factors that should help to guide your decision.  Loan-to-Value (LTV) and credit score.

 

Those with great credit and a qualified LTV loan scenario under 80 percent will most likely get the lowest mortgage rates applying for a prime conventional home loan product.  Borrowers with bad credit and a high LTV loan scenario over 80 percent should receive the best interest rates by going with an fha mortgage.  Depending upon the specific loan applied for, the resulting mortgage rate difference can be up to 2 percent and even higher in some instances.