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in Fresno, CA
Most Fresno buyers start by comparing conventional and FHA loans. Both work well here, but they serve different financial profiles.
Your credit score and down payment size usually determine which loan makes sense. The right choice can save you thousands over the loan term.
Conventional loans require 620+ credit and typically 5-20% down. You avoid mortgage insurance with 20% down, which lowers your monthly payment significantly.
These loans offer the lowest rates for well-qualified borrowers. If your credit is above 740 and you have solid income documentation, conventional usually wins on cost.
FHA loans accept credit scores as low as 580 with 3.5% down. You need just 500 credit if you put 10% down, making homeownership accessible to more Fresno buyers.
You'll pay an upfront mortgage insurance premium of 1.75% plus annual MI that never drops off on most loans. The trade-off is easier approval with less cash needed upfront.
Down payment is the clearest split. Conventional requires 5% minimum but rewards 20% with no MI. FHA starts at 3.5% but charges MI for the loan life.
Credit standards diverge sharply. Conventional cuts off at 620 and prices heavily on score. FHA accepts 580 and prices everyone similarly regardless of credit.
Loan limits matter less in Fresno where most properties fall below both caps. The bigger cost difference comes from MI structure and interest rate pricing tiers.
Choose FHA if your credit is below 680 or you have less than 10% down. The easier approval and lower upfront cash usually offset the higher long-term MI costs.
Go conventional if your credit exceeds 720 and you can put 10-20% down. You'll get better rates and can eliminate MI entirely with 20% equity.
Run the numbers both ways with a broker. Sometimes FHA wins even with good credit if you want to preserve cash for reserves or home improvements.
Yes, you can refinance to conventional once you have 20% equity. This removes FHA's permanent MI and typically lowers your monthly payment.
Both close in 21-30 days typically. Conventional may be slightly faster since FHA requires additional property inspections and appraisal reviews.
Sellers slightly favor conventional because FHA appraisals are stricter on property condition. This matters more on older homes needing repairs.
You'll see the lowest rates at 740+ credit. Pricing improves in tiers at 680, 700, 720, and 740.
Yes, if you put less than 10% down. With 10%+ down, FHA MI drops after 11 years instead of lasting the full loan term.