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Compton buyers benefit from conforming loans because most properties fall well under the 2024 limit of $832,750. This keeps you in the lower-rate tier that Fannie Mae and Freddie Mac backing provides.
First-time buyers and move-up purchasers use conforming loans more than any other product here. The pricing advantage over jumbo loans matters when you're stretching to qualify.
Conforming Loans in Compton
You need 620 minimum credit for conforming loans, though 680+ gets better pricing. Income verification requires two years of W-2s or tax returns if you're self-employed.
Down payment starts at 3% for first-time buyers, 5% for repeat purchasers. Expect to pay mortgage insurance below 20% down until you hit that equity threshold.
Debt-to-income ratios max out at 50% in most cases. Lenders calculate your total monthly debts against gross income to determine what you can borrow.
Local decision guide
Use this guide to connect conforming loans eligibility, lender expectations, and local market factors before comparing payment options in Compton.
Compton buyers benefit from conforming loans because most properties fall well under the 2024 limit of $832,750. This keeps you in the lower-rate tier that Fannie Mae and Freddie Mac backing provides.
First-time buyers and move-up purchasers use conforming loans more than any other product here. The pricing advantage over jumbo loans matters when you're stretching to qualify.
You need 620 minimum credit for conforming loans, though 680+ gets better pricing. Income verification requires two years of W-2s or tax returns if you're self-employed.
Every major wholesale lender offers conforming loans because Fannie Mae buys them. This creates real competition—I often see rate differences of 0.375% between lenders on the same day.
Credit unions and local banks tend to match wholesale pricing but move slower. Direct lenders advertise low rates but lack flexibility when your file has any wrinkles.
Shopping your loan across 200+ wholesale lenders matters here. A $400,000 conforming loan at 6.5% versus 6.875% costs you $90 more per month for 30 years.
Compton buyers often qualify for conforming loans but don't realize it. They assume FHA is their only option because of lower credit scores or smaller down payments.
Conforming beats FHA when you have 680+ credit and 5% down. You'll pay less in mortgage insurance and can cancel it at 20% equity instead of carrying it for the loan term.
Watch your loan amount if buying near the conforming limit. Crossing $832,750 by even $1,000 pushes you into jumbo territory with different rates and requirements.
FHA loans require 3.5% down versus 3% conforming, but the mortgage insurance costs more. FHA charges 1.75% upfront plus 0.55-0.85% annually that never drops off on most loans.
Jumbo loans kick in above $832,750 and typically cost 0.25-0.50% more in rate. They also require 10-20% down and stronger credit profiles than conforming programs allow.
Conventional 97 programs let first-timers put down just 3% through conforming guidelines. This beats FHA for most buyers with decent credit scores.
Los Angeles County property taxes run about 1.1% of purchase price annually. This affects your debt-to-income calculation and how much home you can afford under conforming guidelines.
Appraisals in Compton sometimes come in below contract price in transitional neighborhoods. Conforming loans require the lower of purchase price or appraised value, so this caps your loan amount.
HOA fees in newer Compton developments add to your monthly payment for qualification purposes. Lenders count these in your debt ratio even though they're not actual debt obligations.
$832,750 for single-family homes. This is the standard limit for most California counties outside high-cost areas like San Francisco or Orange County.
Yes, if you're a first-time buyer or meet HomeReady/Home Possible income limits. Repeat buyers typically need 5% down for conforming financing.
680+ gets you standard pricing. Below 680, expect rate adjustments of 0.25-1.0% depending on down payment and other risk factors.
Your conforming loan amount drops to match the appraised value. You'll need a bigger down payment or negotiate a lower purchase price with the seller.
Yes, below 20% down payment. Unlike FHA, you can cancel it once you reach 20% equity through payments or appreciation.
Absolutely. You'll provide two years of tax returns instead of W-2s. Lenders average your income and subtract business write-offs to calculate qualifying income.