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in Mountain House, CA
Mountain House buyers face a real choice: put more down with a conventional loan or use FHA's low down payment to get in faster.
Your credit score, savings, and how long you plan to stay all drive this decision. There's no universal right answer.
Conventional loans aren't backed by the government. Lenders take on the risk, so they set tighter standards — typically 620+ credit and stable income.
The payoff: no upfront mortgage insurance premium and cancellable PMI once you hit 20% equity. That saves real money over time.
FHA loans are insured by the federal government. That lets lenders approve borrowers with scores as low as 580 with just 3.5% down.
The catch: FHA charges mortgage insurance for the life of the loan in most cases. You can't cancel it without refinancing.
The mortgage insurance structure is the biggest gap. Conventional PMI drops off. FHA MIP typically doesn't — not without a refi.
HousingWire flagged the 30-year fixed hitting 6.57% with application volume dropping over 10%. At those rates, long-term MIP on an FHA loan adds up fast. Rates vary by borrower profile and market conditions.
If your credit is above 700 and you have 5-10% saved, conventional almost always costs less over time. Go that route.
If your score is between 580-640 or your savings are tight, FHA gets you in the door. Just plan to refinance out of it when your equity builds.
Yes — you refinance once you have enough equity. Many borrowers do this to drop the MIP and lower their monthly payment.
Conventional conforming limits typically run higher than FHA limits in most California counties. Check current limits before assuming either covers your purchase price.
FHA requires an appraisal that meets minimum property standards. A separate inspection is always smart, but it's not FHA-mandated.
Scores above 740 unlock the best conventional pricing. Below 680, FHA may actually offer a more competitive effective rate.
Some sellers prefer conventional offers. FHA's property condition requirements can complicate deals on older or distressed homes.