Question 1

What credit score do I need for each loan in Los Banos?

Accepted Answer

FHA requires 580 for 3.5% down. Conventional starts at 620, but you want 700+ for competitive rates.

Question 2

Can I avoid mortgage insurance with an FHA loan?

Accepted Answer

No. FHA requires both upfront and annual MIP on every loan. The only exit is refinancing into a conventional loan later.

Question 3

Which loan has a lower down payment?

Accepted Answer

FHA allows 3.5% down at 580+ credit. Conventional can go as low as 3%, but only for well-qualified borrowers.

Question 4

Is FHA always cheaper for first-time buyers?

Accepted Answer

Not always. FHA's lifetime MIP often costs more than conventional PMI. Run the numbers for your specific loan amount.

Question 5

Do both loans work for Merced County home prices?

Accepted Answer

Yes. Both programs have loan limits that cover typical Los Banos price ranges. Confirm current limits with your broker.

Question 6

Can I switch from FHA to conventional later?

Accepted Answer

Yes, through a refinance. Many borrowers start on FHA, build equity, then refinance conventional to drop the MIP.

Conventional vs FHA Loans in Los Banos, CA