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in Vacaville, CA
Most Vacaville buyers face the same fork in the road: conventional or FHA. The right answer depends on your credit, savings, and how long you plan to stay.
These two loan types cover the majority of purchase transactions we close in Solano County. Knowing the tradeoffs upfront saves time and money.
Conventional loans are not government-backed. Lenders take on the risk, so they set stricter standards — typically 620+ credit and 3-5% down minimum.
The big advantage: no upfront mortgage insurance premium. If you put 20% down, you skip private mortgage insurance (PMI) entirely.
FHA loans are insured by the federal government. That backstop lets lenders approve borrowers with scores as low as 580 and just 3.5% down.
The tradeoff is mortgage insurance. FHA charges an upfront premium of 1.75% plus an annual premium — and it sticks for the life of the loan in most cases.
Mortgage insurance is the biggest cost difference. Conventional PMI cancels when you hit 20% equity. FHA annual MIP typically never goes away without a refinance.
HousingWire flagged the 30-year fixed rate at 6.57% recently — at that level, FHA's slightly lower rates matter less when you factor in lifetime MIP costs for Vacaville buyers.
Strong credit above 680 and 5%+ saved? Conventional almost always wins on total cost over time. FHA's ongoing MIP eats into your savings year after year.
Credit below 640 or high debt-to-income ratio? FHA is often the only path to approval. It exists precisely for borrowers conventional lenders turn away.
Yes — refinancing into a conventional loan removes FHA mortgage insurance. You'll need enough equity and qualifying credit at that time.
Conventional conforming limits exceed FHA limits in most California counties. Run your purchase price against current limits before choosing.
FHA allows sellers to cover up to 6% of closing costs. Conventional caps seller concessions lower depending on your down payment.
Yes, if your score is 580 or above. Drop below 580 and FHA requires 10% down — which changes the math considerably.
Conventional loans often close faster. FHA appraisals have stricter property condition requirements that can slow things down.
You need 620 to qualify, but rates improve noticeably above 740. Borrowers in that range get the strongest conventional pricing.