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in La Puente, CA
La Puente buyers face a clear choice: conventional loans reward strong credit with lower costs, while FHA loans open doors for buyers with smaller down payments. Most deals I close here split 60-40 between these two options.
Your credit score and cash reserves usually decide this for you. One loan saves you money long-term, the other gets you in the door faster.
Conventional loans require 620+ credit and typically 5-20% down. You'll pay less in mortgage insurance if you put down 10% or more, and it drops off completely at 20% equity.
These loans cap at $806,500 in Los Angeles County for 2025. Strong borrowers get the best rates because there's no government backing — lenders price for risk directly.
FHA loans accept 580 credit scores with 3.5% down. You'll pay 1.75% upfront mortgage insurance plus 0.55-0.85% annual premiums that stay for the loan's life on most loans.
Sellers can contribute up to 6% toward closing costs, which helps cash-strapped buyers. FHA also allows higher debt ratios — up to 50% in some cases — making approval easier despite tight budgets.
Credit requirements split these loans cleanly. Below 640, FHA usually wins because conventional either denies you or prices so high it's not worth it. Above 700, conventional beats FHA on total cost every time.
Mortgage insurance is where conventional pulls ahead long-term. That permanent FHA premium costs $250-400 monthly on a typical La Puente home. Conventional drops that expense once you hit 20% equity through payments or appreciation.
If your credit sits below 660 or you're scraping together 5%, FHA makes sense despite the permanent insurance. You're getting approved when conventional would either reject you or charge rates that erase any savings.
Above 680 credit with 10% down? Go conventional. You'll pay less monthly and the insurance drops off. I've run both scenarios on hundreds of La Puente deals — conventional wins on 7-year cost once you clear those thresholds.
Yes, most borrowers refinance to conventional once they build 20% equity and their credit improves. This drops the permanent mortgage insurance FHA charges.
Both take 25-35 days typically. FHA appraisals sometimes add 3-5 days because inspectors check more safety items that might need repairs before closing.
FHA accepts bankruptcies after 2 years and foreclosures after 3 years. Conventional requires 4 and 7 years respectively with some exceptions.
Sellers can reject any offer. Some avoid FHA fearing appraisal issues, but competitive offers with solid pre-approval get accepted regardless of loan type.
With 5% down, FHA costs about $350 more monthly than conventional for good credit borrowers. That gap comes entirely from higher mortgage insurance.