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in Fowler, CA
Fowler buyers face a clear choice: put down 20% with conventional financing or get in with 3.5% through FHA. Both work for starter homes and move-up buyers, but the right pick depends on your credit score and how much cash you have.
Most Fowler borrowers qualify for one or both options. The spread between their rates is usually tight, so the real decision comes down to upfront costs versus monthly payments.
Conventional loans demand 620+ credit and stable income, but they reward strong profiles with lower rates and no mortgage insurance once you hit 20% equity. You can put down as little as 3%, though PMI applies until you reach 20%.
These loans give you the most flexibility on property types and purchase prices. No upfront funding fee, and PMI drops off automatically at 78% loan-to-value without refinancing.
FHA loans accept 580 credit scores and let you count overtime, bonus pay, and non-occupant co-borrower income more easily. The 3.5% down payment makes homeownership accessible faster, especially for first-time Fowler buyers building equity.
You pay 1.75% upfront mortgage insurance plus annual premiums that last the life of the loan on most purchases. Debt-to-income ratios can stretch to 50% with strong compensating factors.
Credit standards separate these loans the most. Conventional pulls hard at 620 and rewards 740+ scores with rate breaks. FHA starts at 580 and prices almost everyone the same, which helps borderline credit profiles.
Mortgage insurance works completely differently. Conventional PMI costs 0.3% to 1.5% annually and drops off. FHA charges 1.75% upfront plus 0.55% to 0.85% annually for the loan term, which means refinancing is the only exit.
Pick FHA if you have under 10% down or credit below 680. The higher monthly MI gets offset by easier approval and lower upfront cash. Plan to refinance to conventional once you build equity and improve your credit.
Choose conventional with 700+ credit and 10%+ down. You save hundreds monthly by avoiding lifetime MI, and the loan gives you more property type options. The rate advantage grows significantly above 740 credit.
Yes, you can refinance once you have 20% equity and stronger credit. Most Fowler buyers do this to drop FHA mortgage insurance after a few years.
Rates vary by borrower profile and market conditions. Conventional typically beats FHA by 0.125% to 0.25% for 740+ credit scores, but FHA can win for borderline credit.
FHA caps loans at $498,257 in Fresno County for 2024. Conventional conforming goes to $766,550, giving you more purchasing power on higher-priced Fowler homes.
Usually yes. You avoid all mortgage insurance and get the best rates. FHA only makes sense at 20% down if credit issues block conventional approval.
Conventional allows up to 3% seller concessions. FHA allows 6%, which helps Fowler buyers cover upfront costs when negotiating power allows.