 TITLE: Is an FHA Loan Worth It if You Have Good Credit? CONTENT: Financial Trade-Offs of FHA Loans\n---------------------------------\nThe lower barriers to entry on FHA loans come with financial trade-offs, and those additional costs are the main reason to consider a conventional loan if you qualify for one:\n*   **Mortgage insurance:** You'll be charged an upfront mortgage insurance premium (MIP) of 1.75% of the loan amount on every loan. (This amount can be financed and added to the monthly loan payment, with applicable interest charges.) Depending on your credit scores, an additional MIP of 0.45% to 1.05% of the loan amount is also charged annually and added to your monthly payment. If you make a down payment less than 10% on an FHA loan, these MIP charges remain for the life of the loan; if you put 10% or more down, MIP charges are removed after 11 years.\n*   **Interest rates:** Depending on your credit score, lenders that issue FHA loans typically charge interest rates that are anywhere from 0.5% to 1.5% higher than those available on conventional loans.\nThese costs, particularly on loans where MIPs are required for the entire life of the loan (or until you refinance), can add up to tens of thousands of dollars over the life of a 30-year mortgage. If your good credit qualifies you for a conventional loan with better borrowing terms, it's wise to consider one. END