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in Santa Monica, CA
Santa Monica's competitive real estate market gives you two clear mortgage paths: conventional or FHA. Your credit score and down payment funds determine which one actually works.
Most Santa Monica buyers lean conventional to avoid FHA loan limits. But if you're stretching to afford the westside, FHA's 3.5% down payment can be the difference between buying now or waiting two more years.
Conventional loans set the standard for Santa Monica buyers with solid credit. You need a 620 minimum score, but 740+ gets you the best rates.
Put down 20% and you skip private mortgage insurance entirely. Go below 20% and you'll pay PMI until you hit that equity threshold—but it drops off automatically, unlike FHA.
Conventional loan limits in Los Angeles County run higher than FHA, giving you more buying power for pricier Santa Monica properties. Rates typically beat FHA if your credit's above 700.
FHA loans open the door for Santa Monica buyers with credit scores as low as 580. You'll pay 3.5% down instead of the 10-20% most conventional lenders want.
The catch: you're stuck with mortgage insurance for life on most FHA loans. Upfront MIP costs 1.75% of your loan amount, then annual premiums run 0.55-0.85% depending on your down payment.
FHA works when your credit's rebuilding or cash is tight. Lower loan limits mean you might hit the ceiling on higher-priced Santa Monica homes, but for condos or smaller properties, it gets deals done.
Credit requirements split these loans apart. FHA accepts 580 scores where conventional demands 620 minimum, often preferring 680+.
Down payments look appealing with FHA's 3.5%, but that lifetime mortgage insurance costs you long-term. Conventional's 5-20% down feels steeper upfront, yet PMI cancels once you reach 20% equity.
Rates vary by borrower profile and market conditions. With strong credit, conventional typically beats FHA rates by 0.25-0.50%. Below 680 credit, FHA often prices better despite the mortgage insurance load.
Choose FHA if your credit sits below 680 or you can't scrape together more than 5% down. You'll pay for the flexibility through higher long-term costs, but it gets you into Santa Monica property now.
Go conventional when you've got 680+ credit and can manage 10-20% down. You'll access better rates, higher loan limits, and mortgage insurance that actually ends.
Most Santa Monica buyers I work with start FHA then refinance to conventional once their credit improves and equity builds. That two-step approach beats waiting years to save a bigger down payment while rents keep climbing.
Yes, but the condo complex must be FHA-approved. Many Santa Monica buildings aren't on the approved list, which limits your options compared to conventional loans.
Minimum's 620, but competitive Santa Monica rates start at 680. Hit 740 and you'll see the best pricing across all our lenders.
Only if you put down 10% or more—then it drops after 11 years. Less than 10% down and you're paying MIP for the loan's entire life.
Conventional typically closes 3-5 days quicker since FHA requires additional property inspections. In competitive bidding, that speed advantage matters.
Absolutely. Most borrowers refinance to conventional once they hit 20% equity and their credit improves, dumping that lifetime mortgage insurance payment.