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in Pomona, CA
Pomona buyers face a real choice between conventional and FHA financing. Each loan type works for different financial situations, and picking wrong costs you money.
Conventional loans reward strong credit with lower costs. FHA loans open doors for buyers with smaller down payments or credit issues.
Most Pomona first-time buyers start comparing these two options. Understanding the trade-offs between upfront costs and long-term expenses makes the difference.
Conventional loans aren't government-backed, so lenders set stricter standards. You typically need 620+ credit and stable income documentation.
Put down 20% and you skip mortgage insurance entirely. Drop below 20% and you pay PMI, but it cancels once you hit 20% equity.
These loans offer the cleanest path to approval for W-2 earners with good credit. Rates beat FHA when your profile qualifies, and closing costs stay lower without upfront funding fees.
FHA loans accept 580 credit with just 3.5% down. Drop to 500 credit and you need 10% down, but you can still get approved.
You pay an upfront mortgage insurance premium of 1.75% plus annual premiums between 0.55% and 1.05%. This insurance never cancels unless you refinance out.
FHA works well for Pomona buyers stretching to afford a home. The flexible credit standards and minimal down payment open opportunities conventional loans block.
Credit requirements split these loans apart. Conventional needs 620 minimum and really rewards 740+ scores with better pricing. FHA starts at 580 and treats most scores the same.
Down payment flexibility favors FHA at 3.5% vs conventional's typical 5% minimum. But conventional lets you drop PMI while FHA mortgage insurance stays forever.
Total costs flip based on your situation. Strong credit with 10%+ down makes conventional cheaper over time. Tight credit or small down payment means FHA costs less upfront despite higher long-term insurance.
Choose FHA if your credit sits below 680 or you're scraping together a minimal down payment. The easier approval and 3.5% down outweigh the lifetime mortgage insurance when you need to get into a home now.
Pick conventional when you have 680+ credit and can put down 10% or more. You'll pay less monthly and the PMI disappears after a few years of payments.
Some Pomona buyers start with FHA then refinance to conventional after building equity. This works if rates stay stable and your credit improves enough to offset closing costs.
Yes, conventional loans allow 3% down for first-time buyers and single-unit properties. You need 620+ credit and income limits apply in some cases.
Not usually. FHA rates run similar or slightly higher, and the mandatory mortgage insurance makes total monthly costs higher for most qualified borrowers.
FHA changed rules in 2013 making mortgage insurance permanent for loans over 90% LTV. You must refinance to conventional to remove it.
FHA accepts lower credit scores and higher debt ratios. Conventional requires stronger financials but rewards that profile with better long-term costs.
Yes, FHA allows up to four units if you occupy one. Down payment stays 3.5% even for duplexes and triplexes.