Question 1

Can I use a conventional loan with only 3% down in Campbell?

Accepted Answer

Yes. Conventional loans allow 3% down for primary homes. You'll pay PMI until you reach 20% equity, but the insurance costs less than FHA and cancels automatically.

Question 2

What credit score do I need for the best conventional rates?

Accepted Answer

740 or higher gets you top-tier pricing. Each 20-point drop below 740 typically costs 0.25-0.5% in rate, which adds up over 30 years.

Question 3

Does FHA mortgage insurance really never drop off?

Accepted Answer

It stays for the loan's life if you put down less than 10%. Put down 10% or more and it drops after 11 years, but most borrowers refinance before then.

Question 4

Which loan type do Campbell sellers prefer?

Accepted Answer

Conventional financing makes your offer stronger. Sellers see it as more reliable since FHA appraisals scrutinize property condition more strictly than conventional appraisals.

Question 5

Can I switch from FHA to conventional later?

Accepted Answer

Yes, through a refinance. Once you hit 20% equity and your credit improves, refinancing to conventional eliminates mortgage insurance and often lowers your rate.

Question 6

What happens if the Campbell home I want exceeds FHA limits?

Accepted Answer

You'll need conventional or jumbo financing. FHA caps at $806,500 in Santa Clara County, and many Campbell homes price above that threshold.

Conventional vs FHA Loans in Campbell: Which Fits Your Budget?