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in Mountain House, CA
Mountain House buyers face a clear choice: conventional loans reward strong credit with lower costs, while FHA loans open doors with just 3.5% down. Your credit score and savings determine which path saves you money.
Most Mountain House homes fall under conventional loan limits, making both options viable. The difference comes down to upfront cash, monthly payments, and how long you plan to stay.
Conventional loans skip government insurance, which means lower monthly costs if you put 20% down. Put less down and you pay PMI until you hit 20% equity, but that PMI drops off automatically.
You need 620 minimum credit for most conventional loans, though 740+ unlocks the best rates. Lenders cap your debt-to-income at 45-50%, and reserves matter more than with FHA.
FHA loans charge 1.75% upfront mortgage insurance plus annual premiums that last the loan's life if you put less than 10% down. That's the trade-off for accepting 580 credit scores and 3.5% down payments.
Debt ratios stretch to 55-57% with compensating factors, and gift funds cover your entire down payment. Sellers can contribute 6% toward closing costs versus 3% on conventional.
The mortgage insurance gap matters most. FHA charges 1.75% upfront plus 0.55-0.85% annually that never drops off. Conventional PMI costs 0.3-1.5% annually but cancels at 20% equity.
Credit pricing hits differently. A 680 score pays similar rates on both loans. Above 740, conventional wins by 0.25-0.5%. Below 640, FHA typically approves while conventional won't.
Choose FHA if you have under 10% down, credit below 680, or need flexible debt ratios. Plan to refinance to conventional once you build equity and improve your credit profile.
Pick conventional with 680+ credit and 10-20% down payment available. You'll pay less monthly and own the flexibility to cancel PMI. Mountain House appreciation helps you hit that 20% equity faster than in slower markets.
Yes, refinance to conventional once you hit 20% equity and 680+ credit. You'll drop the FHA mortgage insurance and likely lower your rate.
Both take 25-35 days typically. Conventional may move slightly faster with strong credit since FHA requires additional property inspections and appraisal standards.
Only if you put 10%+ down, then it drops after 11 years. Less than 10% down means it stays for the full loan term.
740 or higher unlocks top-tier pricing. Each 20-point drop below that costs roughly 0.125-0.25% in rate.
Only if the complex is FHA-approved. Mountain House has limited FHA-approved condo projects, so verify before making offers.