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in Gustine, CA
Gustine buyers usually choose between conventional and FHA financing. Your credit score and down payment size determine which loan saves you money.
Most Merced County borrowers with strong credit pick conventional loans. FHA works better if you're stretching to qualify or putting down less than 10%.
Conventional loans require 620+ credit and typically 5-20% down. You avoid mortgage insurance entirely once you hit 20% equity.
Rates vary by borrower profile and market conditions. Stronger credit scores unlock lower rates and cheaper monthly insurance premiums.
These loans cap at $806,500 in Merced County for 2025. That covers most Gustine properties with room to spare.
FHA loans accept 580 credit scores with just 3.5% down. You pay an upfront insurance premium plus monthly MI for the loan's life.
Total insurance costs run about 0.85% annually on most FHA loans. That's $170 monthly on a $240,000 mortgage — money you never recover.
These loans work well for first-time buyers who lack savings. The trade-off is higher total cost over time.
Credit score creates the biggest gap. FHA accepts 580 while conventional needs 620 minimum, often 640 to get approved without hassle.
Mortgage insurance works completely differently. Conventional MI drops off at 78% loan-to-value. FHA charges you monthly insurance forever unless you refinance.
Down payment minimums favor FHA at 3.5% versus 5% conventional. But that 1.5% savings gets eaten by higher insurance costs within three years.
Pick conventional if your credit tops 680 and you have 5% down. You'll pay less monthly and build equity faster without permanent insurance.
Choose FHA when your credit sits between 580-660 or you only have 3.5% saved. The easier approval outweighs higher costs short-term.
Plan to refinance FHA to conventional once you hit 20% equity. That move eliminates mortgage insurance and cuts your monthly payment significantly.
Yes, refinance once you reach 20% equity and 620+ credit. This drops mortgage insurance and typically lowers your rate.
Conventional loans close 3-5 days quicker on average. FHA appraisals require stricter property inspections that add time.
Most Gustine sellers accept both equally. Conventional can edge ahead on older homes needing repairs that fail FHA standards.
740+ scores unlock top-tier pricing. The rate jump from 739 to 740 often saves $40-60 monthly on typical loan amounts.
No, FHA requires owner occupancy as primary residence. Conventional loans allow second homes and investment properties.