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in Azusa, CA
Most Azusa buyers choosing between conventional and FHA loans focus on the wrong factors. Down payment size matters less than total cost over time.
FHA loans get you in the door cheaper but cost more monthly. Conventional loans require more upfront cash but save thousands in mortgage insurance.
Conventional loans require 620+ credit and stronger financials. You pay private mortgage insurance (PMI) until you hit 20% equity, then it drops off automatically.
Rates beat FHA for borrowers with 680+ credit scores. If you're putting down 10-15%, conventional wins on monthly payment even with higher rates.
FHA loans accept 580 credit with 3.5% down. You pay mortgage insurance forever unless you refinance—1.75% upfront plus 0.55-0.85% annually.
Debt ratios stretch to 57% with strong compensating factors. FHA works for self-employed borrowers who can't document two years of stable income.
Credit matters most. Below 680, FHA rates beat conventional by 0.25-0.5%. Above 720, conventional costs $150-300 less monthly on a $500K Azusa home.
Mortgage insurance is the killer. FHA charges 0.85% annually forever on most loans. Conventional PMI costs 0.3-1.5% but cancels at 20% equity.
Choose FHA if your credit sits between 580-680 or you need flexible debt ratios. Plan to refinance to conventional once you hit 680 credit and 20% equity.
Go conventional if you have 680+ credit and can cover 5-10% down. You'll save $8K-15K over five years on a typical Azusa property even with higher upfront costs.
Yes, if you're a first-time buyer with 620+ credit. You'll pay PMI until you reach 20% equity, but it drops off automatically unlike FHA.
Not on loans with less than 10% down, which covers 95% of FHA borrowers. You must refinance to conventional to eliminate it.
FHA beats conventional for sub-680 credit. Above 720, conventional rates run 0.25-0.5% lower, saving $125-250 monthly on typical Azusa homes.
Both allow up to 4-unit properties as primary residences. FHA requires just 3.5% down on duplexes while conventional needs 15-25%.
Most lenders approve at 620, but you'll get punished on rate. Hit 680 to access competitive pricing and better mortgage insurance terms.