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in Simi Valley, CA
Simi Valley buyers face a real choice: put more down with conventional or use FHA to get in with less. The right call depends on your credit, savings, and how long you plan to stay.
We run both options through 200+ wholesale lenders on every deal. Most buyers are surprised which one actually costs less over time.
Conventional loans aren't backed by the government. Lenders take on the risk, so they want stronger borrowers — typically 620+ credit and stable income.
Put 20% down and you skip private mortgage insurance entirely. That alone saves hundreds per month on a Simi Valley-priced home.
FHA loans are insured by the federal government. That backing lets lenders approve borrowers with credit scores as low as 580 with just 3.5% down.
The tradeoff is mortgage insurance — both upfront and monthly. You pay 1.75% of the loan at closing, then a monthly premium for the life of the loan in most cases.
Conventional PMI is cancellable. Once you hit 20% equity, you request removal and it's gone. FHA monthly MIP on loans made after June 2013 stays for the loan's life if you put less than 10% down.
HousingWire flagged the 30-year fixed hitting 6.57% with applications falling 10.4% week-over-week. At that rate level, the spread between conventional and FHA pricing matters more — FHA rates are often slightly lower, but the MIP erodes that edge fast.
Strong credit and 5%+ saved? Run conventional first. You'll likely pay less monthly and build equity without permanent mortgage insurance.
Credit under 640 or savings tight? FHA gets you in the door. Just plan to refinance into conventional once your equity hits 20% to shed that MIP.
Yes. FHA allows 2-4 unit properties if you live in one unit. Conventional also allows this, but FHA is more flexible on credit and down payment.
FHA rates are often slightly lower. But once you add MIP, the total monthly cost can exceed a conventional loan. Rates vary by borrower profile and market conditions.
Not automatically. If you put less than 10% down on an FHA loan, MIP stays for the life of the loan. You'd need to refinance to remove it.
Most conventional lenders require 620 minimum. But the best pricing starts at 740+. Below 680, FHA often gets you a better total payment.
Both allow as little as 3-3.5% down. The real difference is what happens to mortgage insurance over time — conventional lets you cancel it.
Yes, by refinancing. Most borrowers do this once they've built 20% equity. It eliminates MIP and can lower the monthly payment significantly.