Question 1

Which loan has a lower down payment in Union City?

Accepted Answer

FHA allows 3.5% down with a 580 score. Conventional can go as low as 3% but typically requires stronger credit to qualify.

Question 2

Can I cancel mortgage insurance on an FHA loan?

Accepted Answer

Not easily. Most FHA loans carry MIP for the life of the loan. The only clean exit is refinancing into a conventional loan later.

Question 3

Does my credit score affect which loan I should choose?

Accepted Answer

Yes — significantly. Below 660, FHA often beats conventional on rate. Above 700, conventional pricing gets sharply more competitive.

Question 4

Are there loan limits I need to know about in Alameda County?

Accepted Answer

Both programs have caps. FHA uses county-level limits set by HUD. Conventional loans follow Fannie Mae conforming limits, which are higher in high-cost counties like Alameda.

Question 5

What is MIP and how is it different from PMI?

Accepted Answer

MIP is FHA's mortgage insurance; PMI is conventional's. PMI can be removed at 80% equity. FHA MIP typically stays for the loan's full term.

Question 6

Which loan closes faster in a competitive market?

Accepted Answer

Conventional loans generally close faster. FHA appraisals have additional property condition requirements that can slow the process down.

Conventional vs FHA Loans in Union City, CA