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in Benicia, CA
Most Benicia buyers wrestle with this choice: conventional or FHA? The answer depends on your down payment, credit score, and how long you plan to stay.
Both loans work across Benicia's housing stock, from condos near the waterfront to single-family homes in the hills. The difference shows up in your monthly payment and upfront costs.
Conventional loans give you the cleanest path to homeownership if you have solid credit and savings. You need a 620 credit score minimum, but 740+ unlocks the best rates.
Put down 20% and you skip mortgage insurance entirely. Drop below that threshold and you'll pay PMI until you hit 20% equity, but you can cancel it once you get there.
These loans cap at $766,550 in Solano County for 2024. Anything higher requires a jumbo loan with stricter requirements.
FHA loans exist for buyers who don't have 20% saved or whose credit took a hit. You can get approved with a 580 score and just 3.5% down.
The tradeoff: you'll pay mortgage insurance for life unless you refinance out. Upfront, FHA charges 1.75% of your loan amount, then 0.55-0.85% annually depending on your down payment and loan size.
FHA caps at $644,000 in Benicia. That covers most of the market but eliminates some of the pricier waterfront properties.
The biggest split is mortgage insurance. FHA makes you pay it forever. Conventional drops it once you reach 20% equity, which happens faster in an appreciating market.
Credit score matters more with conventional loans. A 680 score might get rejected or priced poorly on conventional but sails through FHA underwriting without issue.
Down payment flexibility favors FHA at first glance, but conventional also offers 3% down programs for first-time buyers. The gap isn't as wide as most people think.
Choose FHA if your credit sits below 680 or you're stretching to afford the down payment. You'll pay more over time, but you'll get approved and start building equity now.
Go conventional if you have 680+ credit and at least 5% down. Even with PMI, your monthly payment usually beats FHA once you factor in lower rates and cheaper insurance.
Planning to stay less than five years? FHA's upfront insurance hurts less when you're not carrying the loan long-term. Staying ten years or more? Conventional wins as equity builds and PMI falls off.
Yes, refinancing from FHA to conventional eliminates mortgage insurance once you hit 20% equity. Most borrowers do this within 3-5 years if home values rise.
Conventional typically costs less upfront because FHA charges 1.75% of your loan amount for mortgage insurance at closing. That's $7,000 on a $400,000 loan.
Conventional offers compete better because appraisals are less strict. FHA appraisers flag repair issues that conventional appraisers often overlook, which can kill deals.
You can get approved at 620, but rates drop significantly at 680 and again at 740. Below 680, FHA often costs less monthly despite higher insurance.
Only if the complex is FHA-approved, which many smaller buildings aren't. Conventional works for any condo that meets standard lending requirements.