Question 1

Can I switch from FHA to conventional later?

Accepted Answer

Yes. Once you build equity and improve your credit, you can refinance into conventional. That removes the lifetime FHA mortgage insurance.

Question 2

Which loan has a higher limit in Santa Cruz County?

Accepted Answer

Both have county-specific limits set annually. Check current FHFA and FHA limits — Santa Cruz County often qualifies for higher limits as a high-cost area.

Question 3

Is FHA always easier to qualify for?

Accepted Answer

Generally yes. FHA allows lower credit scores and higher debt-to-income ratios. But lenders can layer on additional requirements above FHA minimums.

Question 4

What is PMI and when does it go away on conventional?

Accepted Answer

PMI is private mortgage insurance. On conventional loans, lenders cancel it automatically when you reach 20% equity in the home.

Question 5

Does FHA work for condos in Capitola?

Accepted Answer

Only if the condo project is FHA-approved. Many California condo associations aren't on that list. Verify the project before assuming FHA works.

Question 6

Which loan is better for a first-time buyer in Capitola?

Accepted Answer

Depends on your savings and credit. FHA lowers the barrier to entry. Conventional costs less over time if you qualify with solid credit.

Conventional vs FHA Loans in Capitola, CA