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in Goleta, CA
Goleta sits in one of California's pricier coastal markets. The loan you choose affects your rate, monthly payment, and long-term costs.
These two loans serve different borrower profiles. Knowing the difference saves you real money over the life of the loan.
Conventional loans aren't government-backed. Lenders set their own guidelines within Fannie Mae and Freddie Mac standards.
You need at least a 620 credit score. Put down 20% and you skip mortgage insurance entirely — a big monthly savings.
FHA loans are insured by the federal government. That backing lets lenders approve borrowers with credit scores as low as 580.
The minimum down payment is 3.5%. The tradeoff is mandatory mortgage insurance — both upfront and monthly, for the life of the loan in most cases.
Mortgage insurance is the biggest practical difference. FHA charges it regardless of equity. Conventional drops it once you hit 20% equity.
HousingWire flagged the 30-year fixed rate at 6.57% — rates vary by borrower profile and market conditions. FHA rates often run slightly lower, but total payment costs can be higher once you factor in MIP.
If your credit score is above 700 and you have 10–20% down, conventional almost always wins. Less insurance cost, cleaner terms.
If your score is under 640 or your down payment is tight, FHA gets you into the market now. You can refinance into conventional later once your equity builds.
Only FHA-approved condo projects qualify. Check the HUD approval list before making an offer — many Santa Barbara County condos aren't on it.
Both follow the same county conforming limits. FHA limits are set separately and are typically lower than conventional conforming limits.
Conventional typically closes faster. FHA requires an FHA appraisal with stricter property condition standards, which can add time.
Not without refinancing. If you put less than 10% down on an FHA loan, MIP stays for the life of the loan.
Lenders require a 620 minimum. But below 700, your rate and PMI cost go up. Above 740 is where conventional pricing gets competitive.
FHA 203k is built for rehab purchases. Standard conventional loans won't fund a property in poor condition — neither will a standard FHA loan.