conventional is always your best bet if you are looking to avoid teh hastles that do come with fha, besides check with the fha loan you were approve dto see if they have a recapture clause, this makes you pay fha back if you sell or refiancne your home in a certain amount of time, much like a prepayment penalty. you should be able to get a 30 year fixed conventional loan for close to fha rates if you have great credit. goo dluck with your purchase Lyndsay

Lender answer:

1.) FHA requires just 3.0% down at present; this will go up to 3.50% on January 1, 2009.

2.) FHA Mortgage Insurance Premium (MIP) is required on all FHA loans unless your down payment is 10% or greater on a 15 year note. MIP is (at present) 1.5% of the loan amount at closing plus 0.05% of the loan amount spread out over 12 payments.

3.) If you put down less than 20% on a conventional (ie non-FHA/VA mortgage) your rate will be higher - perhaps significantluy higher - and you will pay Private Mortgage Insurance (PMI). The rate will be higher because Fannie/Freddie charge larger fees for lower down payments.

What to do:
Get a quote for an FHA loan with 3% down versus a quote for 15% down on a conventional loan. With 15% down on a conventional loan, you might be able to go with LPMI (Lender-paid Private Mortgage Insurance) which will be built into your rate. If you plan to own your home long term, this would probably not be a good idea.