Loading
in Yreka, CA
Most Yreka buyers narrow their choice to conventional or FHA loans. Both get you the keys, but the down payment, credit threshold, and monthly costs differ sharply.
FHA loans open doors for first-time buyers with thin credit files. Conventional loans reward stronger profiles with lower insurance costs and faster equity build.
Conventional loans don't carry government backing, so lenders price them on your credit strength. Put down 20% and you skip private mortgage insurance entirely.
Below 20% down, you'll pay PMI until you reach 78% loan-to-value. Unlike FHA, this insurance drops off automatically once your balance shrinks enough.
FHA loans charge two layers of mortgage insurance: 1.75% upfront and 0.55% annual premium on most loans. That upfront fee rolls into your balance, so you finance it over 30 years.
The trade-off is access. FHA accepts 580 credit scores and higher debt ratios than conventional underwriting allows. Gift funds and seller concessions work more easily here.
Credit and down payment separate these two fastest. FHA wins at 580-660 scores with small savings. Conventional wins at 700+ scores once you factor in lifetime insurance costs.
Property condition matters too. FHA requires repairs before closing if the appraiser flags chipped paint or worn roofing. Conventional lenders care less about cosmetic issues.
Choose FHA if your credit sits below 680 or you're scraping together a 3.5% down payment. The upfront and monthly insurance sting, but you get approved now instead of waiting years to rebuild credit.
Choose conventional if you're at 700+ credit and can put down 5% or more. You'll pay less monthly, and the insurance drops once you hit 20% equity through payments or appreciation.
Yes, most borrowers refinance to conventional once they reach 20% equity and 680+ credit. You'll drop FHA insurance and often lower your rate at the same time.
Both take 30-40 days typically. FHA appraisals sometimes add time if the appraiser calls for repairs before closing.
Most conventional lenders set 620 as the floor, though some allow 580. FHA officially accepts 580 but many lenders overlay 600+ minimums.
Over the loan life, yes. FHA charges upfront and monthly premiums that never cancel. Conventional PMI drops at 78% LTV automatically.
Both allow gift funds, but FHA accepts them more easily. Conventional requires at least 5% borrower funds when putting down less than 20%.