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in Burbank, CA
Burbank buyers typically choose between conventional and FHA loans based on down payment savings and credit profile. Both get you into a home, but the path looks different.
Conventional loans reward strong credit with lower costs long-term. FHA loans open doors for buyers with smaller down payments or credit challenges.
Conventional loans aren't government-backed, so lenders set their own requirements. You need 620 credit minimum, but rates improve significantly at 680 and above.
Put down 20% and you skip mortgage insurance entirely. Below that, you pay PMI until you hit 20% equity—then it drops off automatically.
These loans work well for Burbank's condo market since they don't have FHA's strict property approval requirements. Most lenders go up to $766,550 for conventional conforming loans.
FHA loans are insured by the Federal Housing Administration, which lets lenders approve borrowers at 580 credit with just 3.5% down. You can go as low as 500 credit with 10% down.
You pay two types of mortgage insurance: 1.75% upfront (usually rolled into the loan) plus monthly premiums for the life of the loan. That monthly insurance doesn't drop off unless you refinance.
FHA caps loan amounts at $644,000 in Los Angeles County. Properties need FHA approval, which adds time for condos but rarely causes issues for single-family homes.
Credit requirements separate these loans most. Conventional needs 620 minimum but pricing improves dramatically above 680. FHA starts at 580 with consistent pricing.
Mortgage insurance works completely differently. Conventional PMI drops off at 20% equity. FHA insurance never cancels—you refinance to remove it.
Down payment flexibility matters less than buyers think since both start at 3-3.5%. The real gap shows up in monthly costs and long-term equity building.
Choose FHA if your credit sits below 680 or you have past credit events like collections or late payments. The insurance cost hurts, but approval odds improve significantly.
Go conventional if you score 700+ and can document steady income. You'll pay less monthly and build equity faster without permanent insurance.
For Burbank condos, conventional avoids FHA approval delays. For homes above $644,000, conventional is your only conforming option without going jumbo.
Yes, most borrowers refinance to conventional once they hit 20% equity and 680+ credit. This removes the permanent FHA mortgage insurance.
Conventional typically closes 3-5 days faster since FHA requires additional property inspections and appraisal reviews. Condos see bigger timing differences.
Many Burbank sellers favor conventional due to fewer appraisal conditions and faster closes. FHA appraisals can require property repairs before funding.
Rates improve at 680, 700, 740, and 780. The biggest jump happens between 680 and 740—that's where pricing drops noticeably.
No, FHA requires owner occupancy. You need conventional financing for investment properties or second homes in Burbank.