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in Vacaville, CA
Most Vacaville buyers qualify for both conventional and FHA loans. The right choice depends on your down payment size and credit profile.
Conventional loans cost less monthly if you put down 20%. FHA works better with smaller down payments but adds mortgage insurance you can't remove.
Conventional loans require 620 minimum credit, though 740+ gets you the best rates. You can put down as little as 3%, but you'll pay PMI until you hit 20% equity.
The big advantage: PMI drops off automatically at 78% loan-to-value. For Vacaville properties, this typically happens in 5-7 years with normal appreciation.
Loan limits reach $806,500 in Solano County for 2024. Above that, you need a jumbo loan with stricter requirements.
FHA loans accept 580 credit scores with 3.5% down. You pay both upfront mortgage insurance (1.75% of loan amount) and monthly premiums for the loan's life.
The tradeoff: easier approval requirements but higher long-term costs. Monthly mortgage insurance stays until you refinance to conventional or pay off the loan.
FHA loan limits in Solano County match conventional at $498,257 for 2024. This covers most entry-level and mid-range Vacaville homes.
Credit standards separate these loans the most. Conventional needs 620 minimum and prefers 740+. FHA accepts 580 and treats all credit scores similarly after that.
Mortgage insurance works differently. Conventional PMI costs 0.5-1% annually and cancels at 78% LTV. FHA charges 0.85% annually forever, plus 1.75% upfront.
Down payment flexibility favors FHA slightly: 3.5% vs 3% for conventional. But conventional loans allow higher debt ratios with strong credit and larger down payments.
Choose FHA if your credit sits between 580-680 or you can barely cover 3.5% down. The easier approval offsets the permanent mortgage insurance for 3-5 years.
Go conventional if you have 680+ credit and can put down 5% or more. You'll pay less over time once PMI drops off, typically saving $150-300 monthly.
Plan to refinance out of FHA within five years if possible. Once you build 20% equity and improve your credit, conventional loans cost significantly less.
Yes, but conventional might cost less with 620+ credit. Compare both options since you qualify for either.
Both take 30-45 days typically. FHA requires an FHA-approved appraiser which can add 3-5 days in busy markets.
Conventional costs less at closing. FHA adds 1.75% upfront mortgage insurance, roughly $8,750 on a $500k Vacaville home.
FHA 203k allows renovation financing. Conventional requires the home to be move-in ready at closing.
740+ qualifies for top-tier pricing. Every 20-point drop below that adds roughly 0.25% to your rate.