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in Dixon, CA
Dixon buyers often wrestle with this choice: conventional or FHA. Both work here, but they serve different financial profiles.
Conventional loans reward strong credit with lower costs. FHA loans open doors for buyers with smaller down payments or credit challenges.
Conventional loans require 620+ credit and at least 3% down. Put down 20% and you skip monthly mortgage insurance entirely.
Rates run lower than FHA when your credit exceeds 700. You'll pay less over the loan's life if you qualify.
FHA loans accept 580 credit scores with 3.5% down. You'll pay an upfront insurance fee of 1.75% plus annual premiums for the loan's life.
Dixon first-time buyers lean on FHA when conventional underwriting won't approve them. The tradeoff: higher monthly costs from mandatory insurance.
Credit standards split these loans apart. Conventional demands 620 and penalizes scores below 700 with rate adjustments. FHA accepts 580 with consistent pricing.
Mortgage insurance costs differ dramatically. Conventional PMI cancels when you hit 78% loan-to-value. FHA insurance never drops off unless you refinance.
Choose FHA if your credit sits below 680 or you're putting down less than 10%. The easier approval outweighs the insurance cost when conventional won't approve you.
Go conventional with 680+ credit and 5%+ down payment. You'll pay thousands less over time and drop insurance faster. Most Dixon buyers refinance FHA to conventional within three years once their credit improves.
Yes, most borrowers refinance once they hit 20% equity and 680+ credit. This eliminates FHA's permanent mortgage insurance.
Both take 30-45 days. FHA adds an appraisal review step but otherwise moves at the same pace as conventional.
FHA caps loans at $806,500 in Solano County for 2024. Conventional goes higher but requires jumbo loan pricing above $766,550.
Some do because FHA appraisals flag property defects. Cash-heavy markets see more FHA pushback than Dixon typically experiences.
FHA insurance cancels after 11 years with 10%+ down. Still longer than conventional PMI, but better than the full loan term.