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in Lathrop, CA
Lathrop buyers typically face a choice between conventional and FHA financing. Your credit score and down payment size will determine which loan saves you the most money.
Both options work in San Joaquin County, but they target different borrower profiles. One requires stronger credit with a smaller upfront payment, while the other accepts lower scores with mandatory mortgage insurance for life.
Conventional loans require 620 minimum credit for most lenders, though 3% down programs exist. You'll pay private mortgage insurance until you reach 20% equity, then it drops off automatically.
These loans cap at conforming limits, currently $806,500 in San Joaquin County for single-family homes. Interest rates run lower than FHA for borrowers above 740 credit score.
FHA loans accept 580 credit scores with 3.5% down, or 500 credit with 10% down. You'll pay both upfront mortgage insurance (1.75% of loan amount) and monthly premiums for the loan's entire term.
These loans cap at $644,000 in San Joaquin County. FHA works well for first-time buyers or those rebuilding credit after financial setbacks.
The mortgage insurance difference costs thousands annually. FHA charges 0.55% to 0.85% of your loan amount every year, forever. Conventional PMI ranges from 0.3% to 1.5% but disappears when you hit 20% equity.
Credit requirements split at 620. Below that threshold, FHA is your only agency option. Above 700 credit, conventional almost always costs less monthly despite requiring similar down payments.
Choose FHA if your credit sits between 580 and 680, or you need seller concessions for closing costs. The lenient underwriting offsets the permanent mortgage insurance for buyers who can't qualify conventionally.
Pick conventional if you have 680+ credit and plan to stay in the home long-term. You'll pay less upfront, less monthly after hitting 20% equity, and you can borrow more if Lathrop prices push toward county limits.
Yes, through a rate-and-term refinance once you build 20% equity. You'll need 620+ credit to qualify for conventional refinancing and eliminate FHA mortgage insurance.
Both take 21-30 days typically. FHA requires an FHA-approved appraiser and may flag property condition issues that delay closing, while conventional appraisals are more lenient.
Most sellers view conventional as slightly stronger due to fewer appraisal conditions. FHA appraisers scrutinize property condition more closely, which can kill deals on older homes.
You'll see the lowest rates at 740+ credit. The pricing adjustments between 680 and 739 add about 0.25% to 0.5% to your rate.
Yes, both programs allow gift funds from family members. FHA permits 100% of down payment and closing costs as gifts with no minimum borrower contribution.