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in Baldwin Park, CA
Baldwin Park buyers often choose between conventional and FHA loans — two solid options with different trade-offs. Your credit score, down payment, and budget determine which path saves you more money.
FHA loans accept lower credit scores and smaller down payments. Conventional loans cost less monthly if you qualify. Both work for Baldwin Park's price range, but the right choice depends on your profile.
Conventional loans follow Fannie Mae and Freddie Mac guidelines. No government insurance means cleaner terms for borrowers with solid credit. You need at least 620 credit and stable income documentation.
Put down less than 20% and you'll pay PMI — but only until you hit 20% equity. After that, it drops off automatically. This saves thousands compared to FHA's lifetime insurance premium.
FHA loans accept credit scores as low as 580 with 3.5% down. Below 580, you need 10% down. The flexible credit standards help buyers who wouldn't qualify conventional.
You'll pay two mortgage insurance premiums: 1.75% upfront and 0.55% annually for the loan's life. That annual premium never drops off, even when you hit 20% equity. It's the cost of easier approval.
Credit requirements separate these loans fastest. FHA approves 580 scores; conventional wants 620 minimum but rewards 740+ with better rates. A 50-point score difference changes your monthly payment by $100-200.
Mortgage insurance works opposite ways. Conventional PMI costs more monthly but disappears at 20% equity. FHA charges less monthly but never cancels — you're stuck unless you refinance to conventional later.
Choose FHA if your credit sits between 580-680 or you're rebuilding after bankruptcy or foreclosure. The higher insurance cost beats getting denied. Plan to refinance to conventional once your credit improves.
Go conventional if you have 680+ credit and stable W-2 income. You'll pay less over the loan's life, even with PMI. The gap widens every year you keep the loan — FHA's lifetime insurance adds up fast.
Yes, refinance to conventional once you hit 20% equity and 680+ credit. You'll drop the FHA insurance and likely lower your rate. Most borrowers refinance within 3-5 years.
FHA costs more upfront due to the 1.75% insurance premium. On a $500K loan, that's $8,750 added to your loan balance. Conventional has lower total closing costs for qualified buyers.
A 680 score gets you conventional at 6.5%. A 620 score might mean 7.25%. That's $200/month on a $450K loan — $72K over 30 years.
Yes, but FHA allows up to 6% seller concessions while conventional caps at 3-9% depending on down payment. FHA gives buyers more negotiating room.
FHA calculates student loans more favorably than conventional in some cases. Conventional caps DTI at 50%, FHA sometimes allows 56% with strong compensating factors.