Loading
in Temple City, CA
Temple City buyers often face a choice between conventional and FHA financing. Each loan type has different down payment rules, credit standards, and insurance costs that directly impact your monthly payment.
Most first-time buyers in Los Angeles County lean toward FHA for the lower upfront cash requirement. Repeat buyers with stronger credit usually save more with conventional loans over time.
Conventional loans require minimum 3% down but typically ask for 620+ credit scores. You pay private mortgage insurance until you reach 20% equity, then it drops off automatically.
Rates often beat FHA if your credit score exceeds 700. You avoid the lifetime mortgage insurance premium that FHA charges, which saves thousands over a 30-year loan.
FHA loans accept credit scores as low as 580 with 3.5% down. You pay an upfront insurance premium of 1.75% plus annual premiums that stick around for the loan's life on most purchases.
Debt-to-income ratios stretch higher with FHA—up to 50% in many cases. This helps Temple City buyers qualify when student loans or car payments eat up significant income.
The insurance structure separates these loans more than anything else. FHA charges 1.75% upfront plus 0.55%-0.85% annually that never goes away on most purchases. Conventional PMI costs 0.3%-1.5% annually but cancels at 20% equity.
Credit score impacts conventional pricing heavily—a 640 score pays much higher rates than a 740. FHA pricing stays more consistent across credit tiers, making it predictable for buyers with past credit issues.
Choose FHA if your credit sits below 680 or you need flexible debt ratios to qualify. The higher insurance costs matter less if you plan to refinance within five years when your credit improves.
Go conventional if your credit exceeds 700 and you can handle the slightly higher down payment standards. You'll pay less in insurance and build equity faster in Temple City's competitive market.
Yes, refinancing to conventional once you hit 20% equity eliminates FHA's lifetime mortgage insurance. Most borrowers do this within 5-7 years to cut monthly costs.
Both take 25-35 days typically. FHA requires an FHA-approved appraiser which sometimes adds 3-5 days in busy markets, but the difference rarely matters.
Conventional offers look slightly stronger because the appraisal standards are less strict. FHA appraisals flag property condition issues that can kill deals.
740+ gets top-tier pricing with conventional loans. The jump from 700 to 740 typically saves 0.25%-0.50% in rate.
FHA loan limits cap at $1,149,825 in Los Angeles County for 2024. Homes above that price require conventional or jumbo financing.