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in Cudahy, CA
Cudahy buyers face a key decision: conventional or FHA financing. Both get you into a home, but they work very differently.
FHA loans let you buy with less cash down and weaker credit. Conventional loans cost less long-term if you qualify.
Conventional loans aren't backed by the government. They follow Fannie Mae and Freddie Mac standards, which means stricter qualification rules.
You typically need a 620+ credit score and steady income verification. Put down 20% and you skip private mortgage insurance entirely.
Lower down payments work — as little as 3% for first-time buyers. But you'll pay PMI until you hit 20% equity, adding $100-300 monthly on most Cudahy homes.
FHA loans are insured by the Federal Housing Administration. This backing lets lenders approve borrowers with 580 credit scores and just 3.5% down.
You'll pay two types of mortgage insurance. An upfront premium of 1.75% gets rolled into your loan. Then monthly premiums last the life of the loan if you put down less than 10%.
FHA works well for buyers rebuilding credit or lacking big down payments. The tradeoff is higher monthly costs compared to conventional financing.
Credit standards split these loans. Conventional wants 620+ and clean credit history. FHA approves 580 scores and borrowers two years past bankruptcy.
Mortgage insurance works differently. Conventional PMI drops off at 20% equity. FHA insurance sticks around for 11 years minimum, often the full loan term.
Down payment flexibility favors FHA at first glance. But conventional offers 3% down programs for qualified first-timers, narrowing that gap considerably.
Choose FHA if your credit sits below 620 or you're within three years of bankruptcy. The insurance costs more over time, but you can refinance to conventional later.
Go conventional with 620+ credit and stable income. You'll pay less monthly and build equity faster. If you have 20% down, conventional saves thousands annually on insurance.
First-time Cudahy buyers with tight budgets often start FHA, then refinance within five years. Repeat buyers with equity typically choose conventional from day one.
Yes, once you have 20% equity and your credit improves. Most borrowers refinance within five years to drop FHA insurance.
Both take 30-45 days typically. FHA appraisals can add time due to stricter property condition requirements.
Usually yes with 620+ credit. Lower rates and cancellable PMI reduce long-term costs significantly.
Most lenders want 620 minimum. You'll get better rates at 680+ and the best pricing at 740+.
Only if the complex is FHA-approved. Conventional has fewer condo restrictions and approves more buildings.