Question 1

What's the minimum credit score for each loan?

Accepted Answer

FHA allows 580 with 3.5% down. Conventional lenders typically require 620, with best rates above 740.

Question 2

Can I avoid mortgage insurance with FHA?

Accepted Answer

Not easily. Most FHA loans carry MIP for the life of the loan. Refinancing to conventional later is the typical exit.

Question 3

Which loan has a lower down payment?

Accepted Answer

FHA requires 3.5% at 580+ credit. Conventional goes as low as 3%, but you'll need stronger credit to qualify.

Question 4

Are FHA loan limits high enough for Placentia homes?

Accepted Answer

Orange County FHA limits are among California's highest. Check current limits — they're updated annually and can affect your options.

Question 5

Which loan is better for first-time buyers in Placentia?

Accepted Answer

Depends on your credit. FHA is more forgiving. But if you qualify for conventional, run both scenarios — the savings can surprise you.

Question 6

Can I use gift funds for the down payment?

Accepted Answer

Yes on both. FHA is more flexible about gift fund sourcing. Conventional lenders may require more documentation on where the money came from.

Conventional vs FHA Loans in Placentia, CA