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in Manhattan Beach, CA
Manhattan Beach home prices mean this choice matters more than in most markets. The loan you pick affects your monthly payment, upfront costs, and whether you can compete with cash-heavy buyers.
Conventional loans dominate here because most properties exceed FHA limits. But FHA can work for condos or smaller homes if you're stretching to buy in.
Conventional loans require stronger credit and bigger down payments than FHA. You'll need 620+ credit for most approvals, though 740+ gets you the best rates.
Put down 20% and you skip mortgage insurance entirely. Drop below that and you pay PMI, but you can cancel it once you hit 20% equity.
These loans handle Manhattan Beach prices better since conforming limits go higher than FHA. You can finance up to $1,149,825 without going jumbo in Los Angeles County.
FHA loans accept 580 credit scores with just 3.5% down. You can even get approved at 500 if you put down 10%, though few lenders go that low.
The catch is mortgage insurance never goes away on minimum down payment loans. You pay an upfront premium of 1.75% plus annual premiums for the loan's life.
FHA limits cap at $644,000 in Los Angeles County for 2024. That cuts out most Manhattan Beach single-family homes but covers many condos.
Credit requirements split these programs hardest. Conventional wants 620 minimum and rewards high scores with rate cuts. FHA approves 580 scores but charges everyone similar rates.
Mortgage insurance works opposite ways. Conventional lets you drop it after gaining equity. FHA makes you pay it forever unless you refinance out.
Loan limits create the biggest local impact. FHA's $644,000 ceiling eliminates 80% of Manhattan Beach inventory. Conventional's higher limits keep more homes in play.
Go FHA if you're buying a condo under $644,000 and have limited savings. The low down payment gets you in sooner, even with credit dings.
Pick conventional if you're buying above FHA limits or can put down 10%+. You'll save thousands yearly once you hit 20% equity and drop insurance.
Most Manhattan Beach buyers end up conventional by necessity. The median home price forces it, and strong financial profiles qualify anyway.
Only if the purchase price stays under $644,000, which is rare here. Most single-family homes exceed FHA loan limits and require conventional or jumbo financing.
Minimum is 3% for first-time buyers, 5% otherwise. But 20% down eliminates mortgage insurance and strengthens offers in competitive situations.
Not on loans with less than 10% down. You'll pay it monthly until you refinance to conventional or pay off the loan completely.
Conventional wins for borrowers with 740+ credit. FHA rates stay flat regardless of score, so lower credit borrowers sometimes see better FHA pricing.
Yes, it shows on your offer. Conventional financing often looks stronger to sellers because it has fewer appraisal and property condition restrictions than FHA.