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in Mill Valley, CA
Mill Valley's competitive real estate market demands smart financing. Both conventional and FHA loans can work here, but they serve different buyer profiles.
Your down payment, credit score, and property price determine which loan makes sense. Most Mill Valley buyers choose conventional, but FHA opens doors for first-time buyers with limited cash.
Conventional loans aren't government-backed, which means stricter credit requirements but more flexibility. You'll typically need 620+ credit and 3-5% down, though 20% down eliminates mortgage insurance.
These loans work well for Marin County because conforming limits reach $806,500 in 2024. Above that, you'll need a jumbo loan, which many conventional lenders offer with similar terms.
FHA loans let you buy with 3.5% down if your credit score hits 580. Below 580, you'll need 10% down, but many lenders want 600+ regardless of FHA minimums.
You'll pay mortgage insurance for the loan's life on most FHA loans, even after hitting 20% equity. The upfront premium runs 1.75% of the loan amount, then annual premiums range from 0.45% to 1.05% depending on loan size and down payment.
Credit requirements separate these loans most clearly. Conventional typically wants 620-640 minimum, while FHA accepts 580 officially and 600 practically. Conventional rewards strong credit with better rates.
Mortgage insurance works differently between the two. Conventional PMI drops off at 20% equity, but FHA mortgage insurance usually stays for 30 years. That monthly cost adds up significantly over time.
Down payment sources matter more for FHA. You can use gift funds from family without restrictions, while conventional loans scrutinize large deposits. FHA also allows higher debt-to-income ratios, often up to 50% versus 43-45% for conventional.
Choose FHA if you have limited savings but stable income. The 3.5% down requirement makes homeownership accessible sooner, especially for Mill Valley's entry-level condos and townhomes.
Go conventional if you can manage 5-10% down and have 680+ credit. You'll save thousands monthly once PMI drops off, and rates run lower from the start. Most Mill Valley single-family homes require conventional because prices push past comfortable FHA ranges.
Run the numbers both ways before deciding. Sometimes FHA's lower down payment gets you in the door, but refinancing to conventional later makes sense once you build equity and improve credit.
Yes, but many Mill Valley homes exceed comfortable FHA loan amounts. You'll likely need conventional or jumbo financing for most single-family properties.
Annual premiums run 0.45-1.05% of your loan amount, divided into monthly payments. On a $500,000 loan, expect $187-437 monthly depending on your down payment.
Conventional loans typically close 3-5 days faster than FHA. FHA requires additional property inspections and has more documentation requirements.
Yes, with 20% down on a conventional loan. FHA always requires mortgage insurance regardless of down payment size.
Absolutely. A 760 credit score might get you 0.5-0.75% lower rates than a 640 score on conventional loans, saving hundreds monthly.