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in Ukiah, CA
Most Ukiah buyers choose between conventional and FHA loans. Your credit score and down payment determine which one saves you money.
FHA works for lower credit scores and smaller down payments. Conventional wins when you have 5% down and a 680+ credit score.
Conventional loans need 620 credit minimum and 3% down. You pay private mortgage insurance under 20% down, but it drops off once you hit 20% equity.
Lenders price these loans based on credit and down payment. A 740 score gets better rates than a 680. If you put 10% down with good credit, conventional beats FHA every time.
FHA accepts 580 credit scores with 3.5% down. You pay two types of insurance: 1.75% upfront plus 0.55% to 0.85% annually. That monthly premium stays for the loan's life on most deals.
These loans work when your credit took a hit or you lack savings. Lenders approve borrowers conventional lenders reject. The tradeoff is higher monthly costs from mandatory insurance.
FHA charges insurance forever on 3.5% down deals. Conventional drops PMI at 20% equity. On a $450,000 Ukiah home, that's $200-400 monthly in permanent costs versus temporary.
Credit pricing differs dramatically. FHA rates stay consistent across score ranges. Conventional punishes scores under 700 with rate hits and approval overlays most lenders add.
Pick FHA if your credit sits under 660 or you need flexible approval. Accept the permanent insurance cost. Pick conventional with 680+ credit and enough savings for 5-10% down.
Run the numbers both ways before deciding. I've seen borrowers choose FHA with 720 credit because they wanted lower down payment. They regret it three years later when they're stuck with insurance.
Yes, once you hit 20% equity and your credit improves. Most borrowers refinance within 3-5 years to drop FHA insurance.
Both take 21-30 days typically. FHA needs more documentation but approval standards are clearer and more predictable.
Yes, slightly. Conventional signals stronger finances. In competitive situations, it matters. In normal markets, sellers accept both.
620 is the floor. Most lenders want 660+ for reasonable rates. Below that, you'll face overlays and rate penalties.
With 3.5% down, yes. Put 10% down and it cancels after 11 years. Most borrowers refinance before then anyway.