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in Lafayette, CA
Lafayette's median home prices push most buyers toward jumbo territory, but starter homes and condos still qualify for both conventional and FHA financing. The right choice depends on your down payment, credit score, and how long you plan to stay.
FHA loans allow 3.5% down but charge mortgage insurance for life on most loans. Conventional loans require higher credit but let you drop PMI once you hit 20% equity. Your monthly payment can swing $200-400 based on which route you take.
Conventional loans need 620+ credit for most programs, though 3% down options exist for first-time buyers. You'll pay PMI until you reach 20% equity, but it drops off automatically—saving you $150-300 monthly once you qualify.
Lafayette buyers with 10-15% down often choose conventional to avoid FHA's lifetime mortgage insurance. Rates run 0.25-0.5% lower than FHA if your credit exceeds 720. Loan limits hit $1,249,125 for 2026 in Contra Costa County before jumping to jumbo.
FHA loans accept 580 credit scores with 3.5% down, or 500-579 with 10% down. You'll pay 1.75% upfront mortgage insurance plus 0.55-0.85% annual MIP that stays for the loan's life if you put less than 10% down.
Monthly mortgage insurance eats $250-400 on a $600,000 loan and never drops off unless you refinance. FHA works best when you need the lower credit threshold or can't hit 5% down for conventional. The same $832,750 limit applies in Contra Costa.
Credit score separates these programs more than down payment. FHA takes 580; conventional wants 620 minimum. But a 680 score with 5% down costs less monthly on conventional because PMI rates beat FHA's mandatory insurance.
Mortgage insurance is the deal-breaker. FHA's MIP never ends unless you refinance. Conventional PMI disappears at 20% equity, often within 5-7 years in Lafayette's appreciating market. That's real money—$3,000-5,000 annually you stop paying.
Choose FHA if your credit sits between 580-660 or you can only scrape together 3.5% down. The higher monthly insurance hurts, but you get into the market now. Plan to refinance to conventional once your credit improves and you hit 10% equity.
Go conventional with 660+ credit and 5% down. You'll pay less monthly from day one and eliminate PMI faster. Lafayette's steady appreciation means most buyers reach 20% equity within six years, making conventional the cheaper long-term play for qualified borrowers.
Only if the complex is FHA-approved. Many Lafayette condos aren't on the approved list, forcing you to conventional. Check HUD's database before making offers.
740+ unlocks top-tier pricing. Every 20-point drop below that costs about 0.25% in rate. A 680 score still qualifies but expect to pay 0.5-0.75% more than 760.
Only if you put 10%+ down—then it drops after 11 years. Under 10% down, MIP lasts the full 30 years unless you refinance to conventional.
Both fit under the $832,750 limit. Conventional costs less monthly with 660+ credit. FHA makes sense only if your score is under 640 or down payment is tight.
Yes, refinance once you hit 10-20% equity and 620+ credit. Most Lafayette buyers do this within 3-5 years to dump the lifetime MIP.