First-Time Homebuyer Guide: FHA vs Conventional Loans in Wake County
By Jason Iacovelli | Sr. Loan Officer, NMLS #3370 | 25+ years experience | Last updated November 2025
Buying your first home in Wake County is exciting, but navigating mortgage options can feel overwhelming with terms like FHA, conventional, PMI, debt-to-income ratios, and down payments. Local expertise is key—so let’s break down your top options step by step.
Understanding Your Two Main First-Time Buyer Loan Options
Most first-time homebuyers in Wake County compare these two:
- FHA loans: Designed for buyers with smaller down payments and less-than-perfect credit. You can qualify with as little as 3.5% down (580+ score), sometimes 10% down with scores in the 500s.
- Conventional loans: Require higher credit scores and down payments but often have lower long-term mortgage insurance for well-qualified buyers (often 5% down, best rates at 680+ scores).
For affordability examples, run your own numbers with the Mortgage Calculator & Amortization Tool after reading below.
The Mortgage Insurance Factor Most First-Time Buyers Miss
Both FHA and conventional loans require mortgage insurance below 20% down, but the details matter:
- FHA: Upfront & annual. Monthly insurance stays for the life of the loan if under 10% down—even after you’ve built 20% equity—unless you refinance to conventional.
- Conventional: PMI drops off automatically at 78% loan-to-value; you can request removal at 80%. Monthly cost is also based on your credit profile.
Learn how mortgage insurance and interest impact your payment using the PITI & amortization calculator to model your true cost over time.
Loan Program Comparisons: Which Fits Best?
Program fit depends on:
- Credit score range
- Down payment budget
- Desired monthly payment
- How long you’ll stay in the home
We cover all major programs in the Loan Types & Services Overview, including FHA, VA, and conventional.
How Credit Score Changes Your Choices
FHA programs are flexible down to 580 credit or lower (10% down), but pricing improves with higher scores. Conventional loans start at 620; best value often starts at 680+. Stronger scores mean lower PMI and better rates. Thinking of improving your score before buying? Visit our First-Time Buyer Guide for tips—or contact Jason for strategies that work fast in the Triangle market.
Down Payment: Options You May Not Know
- FHA = 3.5% down (580+ score); some lenders require 10% with lower scores
- Conventional 3-5% for certain first-time programs
- Gift funds and some local grants are allowed for both programs
Many "need 20% down" myths aren’t true—first-time buyers in Raleigh, Cary, Apex, and Durham often close with far less.
First-Time Buyer Steps: The Right Way
- Estimate budget and run scenarios with the Mortgage Calculator
- Compare loan programs on the Loan Services page
- Get pre-approved! Start with the Pre-Approval Guide
- Read success stories and tips in our First-Time Buyer Guide
- Contact Jason for local advice and competitive rates
If you have questions, email Jason or call 919-525-3933. Experienced help is always a click away. 📧📞
Contact Jason for First-Time Buyer Help 🏠
Why Local Expertise Matters More Than Ever
Your home search strategy in Wake County depends on local conditions. Market insights and loan program knowledge aren't the same everywhere—work with a broker who lives it every day. Jason guides you with up-to-the-minute knowledge, builder intel, and community-specific advice for Raleigh, Cary, Apex, Holly Springs, and more.
Want a deep-dive into expert advice on every part of the North Carolina mortgage process? Don’t miss this mortgage education resource and article referenced in industry circles.
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