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in West Covina, CA
West Covina buyers often wrestle with the same question: conventional or FHA? The right answer depends on your down payment, credit score, and how long you plan to stay in the home.
Conventional loans reward strong credit with lower costs over time. FHA loans get you in the door with less cash upfront and looser credit standards.
Conventional loans come from private lenders without government backing. They offer the cleanest long-term cost structure if you bring a solid credit score and down payment to the table.
Put down 20% and you skip mortgage insurance entirely. Drop below that and you pay PMI, but it cancels once you hit 20% equity through payments or appreciation.
FHA loans are backed by the Federal Housing Administration. They let you qualify with a 580 credit score and just 3.5% down, making homeownership accessible faster.
You pay two types of mortgage insurance: an upfront premium rolled into the loan and monthly premiums for the life of the loan. This is the trade-off for easier entry requirements.
The biggest gap is mortgage insurance. FHA charges 1.75% upfront plus annual premiums that never drop off. Conventional PMI costs less monthly and disappears once you build equity.
Credit standards separate these loans too. Conventional pricing tiers reward scores above 740. FHA treats all scores above 580 the same, which helps borrowers rebuilding credit.
Choose FHA if you have under 10% to put down or credit below 680. The upfront ease outweighs the long-term insurance cost when you need access now.
Go conventional if you can swing 10-20% down and have credit above 700. You save thousands over the loan term by avoiding permanent mortgage insurance. Refinance from FHA to conventional later if you start with FHA and build equity.
No. FHA requires mortgage insurance for the loan's life unless you put down 10% or more, which cuts it to 11 years. Conventional lets you drop PMI at 20% equity.
Minimum 620, but rates improve significantly at 680 and again at 740. FHA accepts 580 with 3.5% down or 500 with 10% down.
FHA upfront mortgage insurance adds 1.75% to your loan amount. Conventional closing costs run lower if you bring 10-20% down and have strong credit.
Yes, if you need to buy now with limited cash. Once you hit 20% equity, refinance to conventional to drop mortgage insurance and lower your rate.
Yes, but FHA requires the condo project to be on their approved list. Conventional has fewer condo restrictions and works with most complexes.