Question 1

Can I refinance out of FHA into conventional later?

Accepted Answer

Yes. Once you've built equity and improved your credit, refinancing into conventional removes MIP. Many Gonzales buyers use FHA as a stepping stone.

Question 2

Which loan has lower monthly payments?

Accepted Answer

It depends on your down payment and credit. Conventional beats FHA on monthly cost once you factor in MIP — but only if your credit qualifies.

Question 3

Does FHA have loan limits in Monterey County?

Accepted Answer

Yes. FHA sets county-level loan limits each year. If your purchase price exceeds that limit, conventional is your only option.

Question 4

What credit score do I need for conventional?

Accepted Answer

Lenders require a minimum 620. Better rates kick in at 740 and above — that gap in rate can be significant over 30 years.

Question 5

Is the FHA upfront premium paid at closing?

Accepted Answer

It's typically rolled into the loan, not paid out of pocket. That 1.75% gets added to your loan balance on day one.

Question 6

Which loan is faster to close?

Accepted Answer

Conventional loans generally close faster. FHA appraisals have stricter property condition requirements that can slow the process down.

Conventional vs FHA Loans in Gonzales, CA