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in Aliso Viejo, CA
Aliso Viejo buyers choosing between conventional and FHA loans face a real tradeoff. Conventional requires more cash down but skips lifetime mortgage insurance. FHA opens doors with 3.5% down but carries insurance costs for life if you put down less than 10%.
Newport Mesa schools are banning e-bikes starting 2026-27, a sign of how quickly this community evolves. Both loan types work here, but the choice hinges on your savings and credit profile.
Conventional at 6.25% works best when you have substantial savings. At 80% LTV the payment is $4,618 with zero PMI—no insurance cost ever.
Underwriting wants documented income and two years of work history. You'll need reserves beyond the down payment and a 740 FICO or higher.
FHA at 5.875% opens the door with just 3.5% down and a 580 FICO floor. The payment is $4,437 on a $750,000 loan, but mortgage insurance runs for life.
With less than 10% down, you're paying MIP forever—roughly 0.55% annually on the loan balance. That's the price of getting in with minimal savings.
The payment gap is $181 per month in FHA's favor, but that ignores the insurance math. FHA's lifetime MIP adds tens of thousands over 30 years. Conventional at 80% LTV has zero insurance—ever.
Down payment is the real divider. FHA lets you in with pocket change. Conventional demands a meaningful chunk upfront but rewards you with no insurance cost and a slightly higher rate.
Pick conventional if you have $187,500 saved and earn above the county median. You'll skip PMI entirely and own the home faster. The higher rate stings less than lifetime insurance.
Choose FHA if your savings are under $30,000 and your credit is solid. The lower payment and minimal down payment matter more than the long-term insurance cost. You can refinance later if your equity grows.
Yes. At 80% LTV (20% down), conventional loans skip PMI entirely. Below 80% LTV, PMI applies until you hit 78% equity. There's no middle ground—either put 20% down or carry insurance.
No. FHA requires a minimum 580 FICO. With a score below 580, you're not eligible. Most lenders want 620 or higher for the best rates and terms.
On a $750,000 loan at 80% LTV, conventional is $4,618 and FHA is $4,437—a $181 monthly gap. But FHA's lifetime mortgage insurance adds roughly $340+ monthly, erasing the payment advantage.
Only if you put down 10% or more. Below 10% down, MIP stays for the life of the loan. At 10%+ down, MIP cancels after 11 years of payments.
The 2026 conforming limit is $1,249,125. Both conventional and FHA loans top out at this same ceiling in Orange County. Anything above requires a jumbo loan.