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in Vallejo, CA
Vallejo buyers face a real choice between conventional and FHA financing. Each loan type solves different problems — conventional rewards strong credit, FHA prioritizes accessibility.
Your credit score and down payment determine which route saves you money. Most Vallejo first-timers lean FHA, but conventional often wins for repeat buyers with equity.
Conventional loans require 620+ credit and 3-5% down for most buyers. You avoid mortgage insurance once you hit 20% equity, which cuts your monthly payment significantly.
Lenders cap your debt-to-income ratio at 43-50% depending on credit strength. These loans handle higher price points better and close faster than government-backed options.
Rates vary by borrower profile and market conditions. Strong credit scores in the 740+ range unlock the best pricing and lowest fees.
FHA loans accept 580 credit scores with 3.5% down. You pay mortgage insurance for the loan's life on most purchases, adding $150-300 monthly on typical Vallejo homes.
The program allows 50-57% debt ratios, helping buyers with car payments or student loans qualify. Gift funds and down payment assistance work with FHA financing.
Appraisals scrutinize property condition more than conventional loans. Sellers sometimes push back on FHA offers due to stricter inspection standards.
Credit requirements split at 620 — below that score, FHA is your only mainstream option. Above 680, conventional pricing beats FHA in most scenarios we run.
Mortgage insurance creates the biggest long-term cost gap. FHA charges upfront and monthly premiums you can't cancel, while conventional drops coverage at 20% equity.
Down payment flexibility matters less than borrowers expect. Both programs start at 3-3.5% down, but conventional demands stronger reserves and income documentation.
Property condition standards favor conventional. FHA appraisers flag peeling paint, broken railings, and roof issues that won't stop a conventional deal.
Choose FHA if your credit sits between 580-679 or your debt ratios push 50%. The higher insurance cost matters less than actually getting approved.
Go conventional with 680+ credit and stable income. You'll pay less monthly and build equity faster without permanent mortgage insurance dragging on your payment.
First-time buyers with thin credit files often need FHA's flexibility. Move-up buyers refinancing FHA loans into conventional once they hit 20% equity save $200-400 monthly.
Your Vallejo property type matters — condos and fixer-uppers face tougher FHA rules. We run both scenarios and show you the real cost difference over 5-7 years.
Yes, most buyers refinance to conventional once they reach 20% equity. This drops mortgage insurance and typically cuts $200-300 from monthly payments.
Conventional loans close 3-5 days faster on average. FHA appraisals take longer due to stricter property condition requirements.
Sellers often favor conventional offers due to fewer appraisal issues. FHA deals require more property repairs, which can delay or kill transactions.
You see meaningful rate improvements every 20 points above 680. The biggest pricing jump happens between 739 and 740 credit scores.
FHA caps at $498,257 in Solano County for 2024. That covers most Vallejo properties, but higher-priced homes require conventional financing.