Question 1

Can I switch from FHA to conventional later?

Accepted Answer

Yes, once you hit 20% equity and your credit improves to 620+, you can refinance to conventional. That's how most buyers escape permanent FHA mortgage insurance.

Question 2

Which loan type closes faster in Arroyo Grande?

Accepted Answer

Conventional typically closes 2-3 days faster because there's no FHA appraisal requirements for property condition. Both take about 30 days total with a competent broker.

Question 3

Do Arroyo Grande sellers prefer one loan over the other?

Accepted Answer

Sellers slightly prefer conventional because FHA appraisals can flag minor repairs that delay closing. In a hot market, that matters more than in normal conditions.

Question 4

What credit score gets me the best conventional rate?

Accepted Answer

You'll see the sharpest rate improvements once you cross 740. Above that, gains are minimal—maybe 0.125% better at 780 versus 740.

Question 5

Can I use FHA for a condo in Arroyo Grande?

Accepted Answer

Only if the complex is FHA-approved. Many Arroyo Grande condos aren't on the approved list, which forces you to conventional anyway.

Question 6

How much is FHA mortgage insurance monthly?

Accepted Answer

Typically 0.55-0.85% of your loan amount annually, divided across 12 months. On a $600K loan, that's roughly $275-425 per month that never goes away.

Conventional vs FHA Loans in Arroyo Grande: Which Fits Your Budget?