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in Walnut, CA
Most Walnut buyers compare conventional and FHA loans first. Both work well here, but they serve different borrowers with different financial profiles.
Your credit score and down payment savings usually decide this. Let's break down which loan fits your situation so you can start shopping homes with confidence.
Conventional loans shine when you have 620+ credit and at least 5% down. You avoid mortgage insurance entirely at 20% down, which saves hundreds monthly.
Lenders want clean credit and steady income. Two years of W-2 history works for most borrowers, and you can use the loan for investment properties too.
Loan limits go up to $1,149,825 in Los Angeles County for 2024. That covers most Walnut properties without jumping to jumbo financing.
FHA loans accept 580 credit scores with just 3.5% down. That's why first-time buyers in Walnut use them when conventional requirements feel out of reach.
You pay mortgage insurance for the loan's life unless you refinance out later. Upfront premium is 1.75% of the loan amount, plus monthly premiums between 0.55% and 0.85%.
The property needs to pass FHA appraisal standards, which can get strict. Older Walnut homes sometimes need repairs before closing if issues come up during inspection.
Credit matters more with conventional loans. FHA gives you approval with scores that conventional lenders reject outright, but you pay for that flexibility through insurance premiums.
Down payment changes your monthly cost dramatically. Conventional at 20% down eliminates PMI, while FHA keeps insurance regardless of equity.
Rates vary by borrower profile and market conditions. FHA rates run slightly lower sometimes, but insurance costs often wipe out any rate advantage within two years.
Choose FHA if you have under 620 credit or less than 10% saved. The lower barriers get you into a home now instead of waiting years to improve your profile.
Go conventional if you have 620+ credit and 10% down. You'll save thousands over the loan term by dropping insurance sooner or avoiding it completely.
Plan to refinance out of FHA once you hit 20% equity and 620+ credit. That move eliminates insurance and usually drops your rate too, cutting your payment significantly.
No. FHA requires mortgage insurance for the loan's life. You must refinance to conventional with 20% equity to eliminate it completely.
Both take 30-45 days typically. FHA appraisals sometimes add a week if repairs are needed before closing can happen.
620 minimum gets approval. 740+ unlocks the best rates and lowest fees from most lenders we work with.
No. FHA requires you live in the home as your primary residence. Use conventional for rental properties instead.
1.75% upfront plus 0.55%-0.85% annually. On a $600K loan, expect $10,500 upfront and $275-425 monthly depending on down payment.