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in Westlake Village, CA
Westlake Village buyers choosing between conventional and FHA loans face a real tradeoff. Conventional requires more down payment but avoids mortgage insurance.
FHA opens the door with 3.5% down but carries insurance costs for the life of the loan. Both programs work in Westlake Village up to the 2026 conforming limit of $1,249,125.
Conventional at 6.25% works best when you have substantial savings. At 80% LTV the monthly P&I is $4,618 with zero PMI.
Underwriting wants documented income and two years of work history. PMI cancels automatically at 78% LTV under the Homeowners Protection Act.
FHA at 5.875% opens doors for buyers with modest savings. The rate is lower than conventional but carries mortgage insurance for life.
Upfront MIP is 1.75% of the loan amount. Annual MIP runs 0.55% of the balance each year.
The payment gap is $181 per month in favor of FHA. Conventional buyers skip mortgage insurance entirely, which saves money over 15+ years.
Down payment is the real divider here. Conventional requires substantially more cash upfront. FHA's 3.5% minimum means you close with less cash out of pocket.
Choose conventional if you have solid savings and plan to stay 15+ years. The higher down payment stings upfront, but you avoid insurance costs that compound over time.
Choose FHA if your down payment is tight but your income is stable. The 3.5% minimum keeps closing costs lower. FHA works for buyers who'll refinance in 7-10 years.
Conventional at 6.25% is $4,618 monthly P&I with no insurance. FHA at 5.875% is $4,437 monthly P&I including annual MIP. FHA saves $181 per month.
Yes. At 80% LTV (20% down) conventional has zero PMI. Below 80% LTV, PMI applies. PMI cancels automatically at 78% LTV.
Yes, but only with 10% or more down. At 96.5% LTV with 3.5% down, MIP runs for the life of the loan. With 10%+ down, MIP cancels after 11 years.
FHA likely wins. The lower rate and payment offset MIP costs over a decade. Conventional makes sense if you'll stay 15+ years.
Yes. Both conventional and FHA accept 740 FICO. Conventional may ask for more reserves and documented income history. FHA is more flexible on reserves.