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in Sierra Madre, CA
Sierra Madre buyers choosing between conventional and FHA loans face a real tradeoff. Conventional at 6.25% demands 20% down but skips mortgage insurance entirely.
FHA at 5.875% lets you start with 3.5% down, though mortgage insurance runs for the life of the loan. The 2026 conforming limit for Sierra Madre is $1,249,125, so both programs work here.
Conventional at 6.25% works best when you have substantial savings. At 80% LTV, the payment is $4,618 monthly with zero mortgage insurance.
Underwriting requires a 740 FICO floor and solid income documentation. Plan on two years of work history and reserves beyond your down payment.
FHA at 5.875% opens the door with just 3.5% down. The monthly payment is $4,437, but mortgage insurance applies for the life of the loan.
You need a 580 FICO minimum to qualify, though 740 gets better pricing. FHA's upfront mortgage insurance is 1.75% of the loan amount.
The down-payment gap is the biggest difference. Conventional requires 20% down to avoid PMI, while FHA gets you in with 3.5%.
Conventional has no mortgage insurance at 80% LTV. FHA's mortgage insurance never cancels if you put down less than 10%. The rate advantage (5.875% vs 6.25%) partially offsets FHA's lifetime insurance cost.
Pick conventional if you have 20% down saved and earn above the county median of $87,760. Your payment stays lower long-term because mortgage insurance never kicks in.
Choose FHA if your down payment is under 15% or you're building credit toward 740. The lower rate and payment offset the lifetime insurance cost when you're not putting down 20%.
Yes — conventional requires 20% down to skip PMI. FHA lets you start at 3.5% down but carries mortgage insurance for the life of the loan if you put down less than 10%.
On these scenarios, FHA is $181 cheaper monthly ($4,437 vs $4,618). FHA's lower rate (5.875%) beats conventional (6.25%), though the loan amounts differ slightly.
Yes — conventional works at 5% to 15% down, but PMI applies until you hit 80% LTV. The insurance cost often makes FHA cheaper when your down payment is under 15%.
Conventional typically requires 740 FICO for best pricing. FHA starts at 580 FICO, though 620+ gets better rates. Both programs accept the same FICO in this scenario.
Yes, but only if you put 10% or more down. With less than 10% down, mortgage insurance runs for the entire loan term. Conventional at 80% LTV has no insurance at all.