Credit & Mortgage Tips
Two of the most common ways to finance a home in Bakersfield are FHA loans and conventional loans — and choosing the right one can save you thousands. The best fit depends on your credit score, down payment, and long-term plans. This guide breaks down the real differences so you can decide with confidence.
Quick Comparison
| Feature | FHA Loan | Conventional Loan |
|---|---|---|
| Minimum credit score | 580 (or 500 with 10% down) | 620 |
| Minimum down payment | 3.5% | 3%–5% |
| Mortgage insurance | Required (usually for the life of the loan) | Removable at 20% equity |
| Loan limit (Kern County, 2026) | $541,287 | $832,750 |
| Best for | Lower credit / smaller down payment | Stronger credit / long-term savings |
What Is an FHA Loan?
An FHA loan is backed by the Federal Housing Administration and designed to make homeownership accessible. It allows lower credit scores and down payments as low as 3.5%, which is why it’s the go-to loan for many first-time and credit-rebuilding buyers. The trade-off: FHA loans require mortgage insurance premiums (MIP), and on most FHA loans that insurance stays for the life of the loan unless you refinance.
What Is a Conventional Loan?
A conventional loan isn’t government-backed and typically requires a credit score of 620 or higher. The big advantage is flexibility: once you reach 20% equity, you can drop private mortgage insurance (PMI) entirely, lowering your monthly payment. Conventional loans often offer better long-term costs for buyers with solid credit.
Which Should You Choose?
An FHA loan may be better if you:
- Have a credit score below 620.
- Have limited savings for a down payment.
- Are a first-time buyer who wants an easier path to approval.
A conventional loan may be better if you:
- Have a credit score of 620 or higher (ideally 700+).
- Can put down enough to avoid PMI, or want to drop it later.
- Plan to stay in the home long term and want lower lifetime costs.
The Real-World Cost Difference
On a typical Bakersfield home around $390,000, the FHA route gets you in with a smaller down payment and easier credit requirements, but you’ll carry mortgage insurance longer. The conventional route may cost a bit more up front but can save money over time once PMI drops off. The “right” choice comes down to your numbers and how long you plan to own — which is exactly what a good lender and agent help you weigh.
Frequently Asked Questions
What is the difference between FHA and conventional loans?
Is an FHA or conventional loan cheaper?
Can I switch from FHA to conventional later?
Which loan is best for first-time buyers?
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