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in South Gate, CA
South Gate buyers face a clear choice: conventional financing with lower lifetime costs or FHA with easier entry. Most borrowers qualify for one but not both.
Your credit score and down payment savings decide which path makes sense. We'll break down the real differences so you can pick the loan that gets you to close.
Conventional loans demand 3-20% down and 620+ credit for most approvals. You skip mortgage insurance at 20% down, which saves thousands over the loan term.
These loans work best when you have decent credit and can scrape together 5% or more. Rates beat FHA when your score tops 700, and no upfront funding fee means less cash to close.
FHA allows 3.5% down with 580 credit and accepts recent credit issues conventional lenders reject. You pay an upfront funding fee plus annual mortgage insurance for the life of the loan.
This loan opens doors for South Gate buyers rebuilding credit or stretching to afford the area. Sellers know FHA deals close reliably when underwritten properly.
Credit makes or breaks this decision. FHA accepts 580 scores conventional lenders won't touch, but charges permanent mortgage insurance. Conventional drops MI at 20% equity and rewards higher scores with better pricing.
Down payment looks similar at first glance—both allow under 5%. But FHA charges 1.75% upfront on top of your 3.5%, while conventional just needs your down payment. That's an extra $5,250 on a $300K loan.
Choose FHA if your credit sits between 580-680 or you had a bankruptcy within three years. The easier approval and lower score requirements outweigh the permanent insurance cost when you're rebuilding.
Go conventional if you score 700+ and can put 5% down. You'll pay less monthly and can refinance out of MI later. South Gate buyers often start FHA and refi to conventional after two years of equity growth.
Yes, most South Gate buyers refinance once they hit 20% equity and 700+ credit. You drop mortgage insurance and usually lower your rate.
Both close in 25-35 days with complete files. FHA appraisals sometimes take longer because inspectors check more repair items.
At 3-5% down, FHA often wins with lower credit. Above 10% down with good credit, conventional costs less monthly and long-term.
Not usually. FHA deals close reliably here and most sellers accept them, especially on homes under $600K.
FHA requires owner occupancy. Conventional allows investment properties but demands 15-25% down and reserves.