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in San Dimas, CA
San Dimas buyers usually narrow their choice to conventional or FHA financing. The right pick depends on your down payment, credit score, and how long you plan to own the home.
Most borrowers assume FHA is always cheaper because of the low down payment. That's wrong. Once you factor in mortgage insurance costs over time, conventional often wins for buyers who can put down 10% or more.
Conventional loans require 620+ credit and typically 5-20% down. You'll pay private mortgage insurance until you hit 20% equity, then it drops off automatically.
Rates run lower than FHA for borrowers with 680+ credit. Lenders price conventional based on your full credit profile, so strong finances get rewarded with better terms.
FHA loans accept 580 credit with 3.5% down. You'll pay 1.75% upfront mortgage insurance plus 0.55-0.85% annual premiums for the loan's life on most purchases.
Debt-to-income limits stretch higher than conventional, often to 50% or beyond with strong compensating factors. That flexibility helps buyers with existing car payments or student loans qualify.
FHA charges mortgage insurance for life on loans with under 10% down. Conventional drops PMI at 20% equity. That difference costs FHA borrowers thousands over 7-10 years of ownership.
Credit scoring works differently. A 640 score gets crushed on conventional pricing but qualifies easily for standard FHA rates. Above 700, conventional usually beats FHA on rate and total cost.
Choose FHA if your credit sits below 660 or you're putting down less than 5%. The lower barriers to entry outweigh the lifetime mortgage insurance cost when you need to buy now.
Pick conventional with 680+ credit and 10%+ down payment. You'll pay less over time and drop insurance faster. Plan to stay under five years? Run both options with actual quotes since FHA's upfront fee shifts the math.
Yes, by refinancing once you hit 20% equity. You'll pay closing costs again, so calculate whether the insurance savings justify the refi expense.
Conventional typically closes 3-5 days faster. FHA requires additional property inspections and appraisal guidelines that add processing time.
Conventional approves more condo buildings. FHA requires the entire complex to meet certification standards that many smaller San Dimas developments don't pursue.
1.75% of your loan amount, financed into the mortgage. On a $500,000 loan, that's $8,750 added to your principal balance.
Both allow 2-4 unit properties if you occupy one unit. FHA requires lower down payments but conventional offers better investor flexibility long-term.