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West Covina sits in the sweet spot for conventional financing. Most homes here fall under conforming limits, making conventional loans the default choice for buyers with decent credit.
The market moves fast when rates dip. Conventional loans close quicker than government programs because underwriters see them daily. That speed matters when you're competing with multiple offers.
Downtown LA pushes prices higher, but West Covina still offers solid inventory under $800k. Conventional loans work best here because you avoid the upfront mortgage insurance hit that FHA requires.
Conventional Loans in West Covina
You need 620 minimum credit for conventional approval. Most lenders want 640+ for competitive rates. The difference between 640 and 720 can cost you half a point on your rate.
Down payment starts at 3% for first-time buyers, 5% if you've owned before. Put down 20% and you skip PMI entirely. That's $300-400 monthly savings on a typical West Covina purchase.
Debt-to-income caps at 50% with strong credit and reserves. Lenders want to see two months of payments in the bank after closing. Self-employed borrowers need two years of tax returns showing stable income.
Local decision guide
Use this guide to connect conventional loans eligibility, lender expectations, and local market factors before comparing payment options in West Covina.
West Covina sits in the sweet spot for conventional financing. Most homes here fall under conforming limits, making conventional loans the default choice for buyers with decent credit.
The market moves fast when rates dip. Conventional loans close quicker than government programs because underwriters see them daily. That speed matters when you're competing with multiple offers.
Downtown LA pushes prices higher, but West Covina still offers solid inventory under $800k. Conventional loans work best here because you avoid the upfront mortgage insurance hit that FHA requires.
We price shop across 200+ wholesale lenders for conventional loans. Rate spreads between lenders hit a quarter point some days. That's real money over 30 years.
Credit unions offer aggressive rates but cap loan amounts lower than you'd think. Portfolio lenders give more flexibility on debt ratios. Wholesale channels beat retail banks by 0.125-0.25% consistently.
Lender overlays matter more than guidelines. One lender rejects 45% DTI, another approves 50%. We know which underwriters accept what before you waste time on an application.
West Covina buyers overpay PMI by choosing the wrong structure. Lender-paid mortgage insurance beats borrower-paid when you're rate-sensitive. Run both scenarios before deciding.
Appraisals come in tight on older West Covina neighborhoods. Have your agent pull comps before you waive contingencies. Conventional loans require the appraisal to hit contract price or you renegotiate.
Conventional loans let you finance a second home or investment property with 15% down. FHA doesn't allow that. Half my West Covina clients keep their first home as a rental using this strategy.
FHA costs more long-term even with lower credit requirements. You pay upfront MIP plus monthly premiums for the loan's life. Conventional PMI drops off at 78% loan-to-value automatically.
Jumbo loans kick in above $832,750 in Los Angeles County. Conventional conforming offers better rates and easier approval below that limit. West Covina pricing keeps most buyers in conforming territory.
ARMs make sense if you're moving in five years. The 7/1 ARM saves 0.50-0.75% versus 30-year fixed. Conventional offers both—FHA doesn't have competitive ARM products right now.
West Covina has mixed housing stock from the 1950s through new construction. Older homes need careful appraisals because condition affects conventional approval more than FHA.
Los Angeles County transfer taxes and recording fees run higher than neighboring counties. Budget an extra $1,500-2,000 in closing costs compared to Riverside or San Bernardino purchases.
Earthquake insurance isn't required but lenders ask about it. Conventional underwriters want to see you've considered it. Budget $800-1,200 annually if you add coverage.
HOA communities are common here. Conventional lenders review HOA financials closely. Deferred maintenance or low reserves can kill your approval even with perfect credit.
Minimum is 620, but you'll get competitive rates starting at 640. A 720+ score unlocks the best pricing and easiest approval.
3% down for first-time buyers, 5% for repeat buyers. Put down 20% to eliminate PMI and strengthen your offer in competitive situations.
Yes, with 15% down minimum for a single-unit rental. You'll need six months reserves and solid rental income documentation.
Conventional costs less long-term because PMI cancels at 78% LTV. FHA charges upfront and monthly premiums for the life of the loan.
$832,750 for single-family homes in 2024. Above that limit you need a jumbo loan with different requirements and pricing.
Yes, typically 21-25 days versus 30-40 for FHA or VA. Underwriters process conventional files daily, creating faster turn times.