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in Garden Grove, CA
Garden Grove buyers choosing between conventional and FHA loans face a real tradeoff. Conventional at 6.25% requires 20% down and no mortgage insurance. FHA at 5.875% lets you start with just 3.5% down but carries lifetime mortgage insurance above 90% LTV.
The 2026 conforming limit for Garden Grove is $1,249,125, so both programs work here. Orange County's median household income is $113,702, which supports purchases well into the mid-range. Your down payment and credit score drive which path makes sense.
Conventional at 6.25% works when you have real savings. At 80% LTV with 20% down, you skip mortgage insurance entirely.
The monthly payment on principal and interest is $4,618. Underwriting wants two years of documented income and solid reserves. Your credit floor is typically 620, but 740+ gets the best rates.
FHA at 5.875% opens the door with just 3.5% down. The lower rate saves $181 per month compared to conventional.
You'll carry mortgage insurance for the life of the loan if down payment is under 10%. FHA accepts credit scores as low as 580 with compensating factors. You'll pay 1.75% upfront mortgage insurance rolled into your loan.
The down-payment gap is the biggest difference. Conventional demands 20% to skip PMI, while FHA lets you start with 3.5%. That gap means FHA buyers keep more cash at closing, but they pay mortgage insurance indefinitely unless they refinance.
Conventional wins on long-term cost if you stay in the home. At 80% LTV, you have zero mortgage insurance and a clean payment. FHA's lower rate helps now, but the lifetime MIP adds up over 30 years.
Choose conventional if you have substantial savings and want to avoid mortgage insurance. Buyers with solid credit and two years of income documentation close faster and pay less over time.
Choose FHA if you're putting down less than 15% and want to close sooner with lower monthly payments. First-time buyers and those with limited savings benefit from the 3.5% entry point. FHA works for buyers who plan to refinance in 5 to 7 years.
On a $750,000 loan, conventional at 6.25% costs $4,618/month and FHA at 5.875% costs $4,437/month. FHA saves $181 per month, but that doesn't include FHA's mortgage insurance premium.
Yes. At exactly 80% LTV (20% down), conventional loans have zero PMI. Below 80% LTV, PMI cancels automatically at 78% LTV under the Homeowners Protection Act.
Yes. FHA accepts 580+ FICO with compensating factors like reserves, lower debt-to-income ratio, or a co-signer. Most lenders prefer 620+. At 740 FICO, you qualify easily for both programs.
If you put down 10% or more, FHA mortgage insurance cancels after 11 years. Below 10% down, MIP runs for the life of the loan unless you refinance to conventional.
Both close in 30 to 50 days with full documentation. Conventional may close slightly faster if you have two years of clean income and substantial reserves.