Question 1

Can I switch from FHA to conventional later?

Accepted Answer

Yes, refinancing from FHA to conventional is common once you build 20% equity and improve your credit. This removes monthly mortgage insurance and can lower your payment.

Question 2

Which loan type closes faster in San Luis Obispo?

Accepted Answer

Both typically close in 30-45 days. FHA appraisals may take slightly longer due to stricter property standards, but processing times are comparable.

Question 3

Do both loans work for condos?

Accepted Answer

Yes, but FHA requires the condo complex to be on their approved list. Conventional loans have fewer condo restrictions, offering more property options.

Question 4

How much does mortgage insurance cost on each?

Accepted Answer

FHA charges 1.75% upfront plus 0.55-0.85% annually. Conventional PMI ranges from 0.3-1.5% annually based on credit and down payment, with no upfront fee.

Question 5

Can I use either loan for a fixer-upper?

Accepted Answer

FHA 203(k) loans specifically fund repairs. Standard FHA and conventional loans require homes to meet safety standards at purchase.

Conventional vs FHA Loans in San Luis Obispo: Which Mortgage Fits Your Goals?