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in San Gabriel, CA
San Gabriel buyers face a key choice: conventional or FHA financing. Each loan type serves different borrower profiles and down payment capabilities.
FHA loans lower the barrier to entry with 3.5% down. Conventional loans reward stronger credit with better long-term costs.
Your credit score and cash reserves determine which path makes sense. We'll break down the real cost difference and approval requirements for each.
Conventional loans aren't government-backed, so lenders set stricter credit standards. You'll need 620+ credit, though 740+ unlocks the best rates.
Down payments start at 3% for first-timers, but you'll pay PMI until you hit 20% equity. The upside: PMI drops off automatically once you reach that threshold.
Debt-to-income ratios typically max out at 45-50%. Lenders want to see stable income and clean credit history over the past two years.
Conventional loans work well for San Gabriel buyers with solid credit who can either put 20% down or tolerate temporary PMI payments.
FHA loans accept 580 credit scores with just 3.5% down. Drop to 500-579 credit and you'll need 10% down instead.
You'll pay an upfront mortgage insurance premium of 1.75% at closing, plus annual MIP that stays for the loan's life if you put down less than 10%. This is the real cost difference.
Debt ratios stretch to 50-55% with compensating factors. FHA focuses more on payment history than perfect credit scores.
San Gabriel borrowers rebuilding credit or stretched on cash reserves find FHA's flexibility worth the insurance cost. It's about access, not always the lowest rate.
Mortgage insurance is the biggest split. Conventional PMI disappears at 20% equity. FHA's MIP stays put for 11+ years or the full loan term, depending on your down payment.
Credit requirements favor different buyers. Conventional rewards 740+ scores with rate cuts. FHA keeps pricing fairly flat across credit tiers.
Down payment minimums look similar at 3-3.5%, but FHA adds that 1.75% upfront fee. On a typical San Gabriel purchase, that's $7,000-$10,000 rolled into your loan.
Loan limits also differ. Conventional conforming loans cap higher in Los Angeles County, giving you more buying power in pricier pockets of San Gabriel.
Choose FHA if your credit sits between 580-680 or you're scraping together the minimum down payment. The insurance cost stings, but it gets you in the door.
Go conventional if you're at 720+ credit or can put 10-20% down. You'll save thousands over the loan term by avoiding permanent mortgage insurance.
Run the numbers both ways. Sometimes FHA's lower rate offsets the insurance drag. Other times conventional wins by a mile, especially if you can hit 20% down.
We shop your scenario across 200+ lenders to find which program actually costs less. Rates vary by borrower profile and market conditions, so pre-approval shows the real comparison.
Yes, through a conventional refinance once you hit 20% equity and 620+ credit. This removes FHA's permanent mortgage insurance.
Both take 21-30 days typically. FHA appraisals can add 3-5 days if the property needs repairs flagged by stricter inspection standards.
No, FHA often requires less. Conventional lenders want 2-6 months reserves depending on down payment and credit profile.
Yes. FHA allows 100% gift funds. Conventional requires 5% of your own money if putting down less than 20%.
Conventional typically runs $2,000-$3,000 less because FHA's 1.75% upfront premium gets added to your loan balance at closing.