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in Novato, CA
Novato sits in Marin County — one of California's priciest markets. The loan you choose affects your rate, your costs, and what you can actually afford.
Conventional and FHA loans serve different borrower profiles. Knowing which fits your credit and down payment changes your deal significantly.
Conventional loans aren't backed by the government. Lenders take on the risk, so they require stronger credit — typically 620 minimum, 740+ for the best rates.
Put down 20% and you skip private mortgage insurance entirely. That saves real money on a Marin County purchase price.
FHA loans require just 3.5% down with a 580 credit score. Drop to 500-579 and you can still qualify with 10% down.
The catch: FHA charges mortgage insurance premium for the life of the loan in most cases. On a high Marin County purchase, that adds up fast.
HousingWire flagged the 30-year fixed hitting 6.57% recently — that gap between conventional and FHA rates matters more when rates are elevated.
Conventional PMI cancels at 80% loan-to-value. FHA MIP on loans with less than 10% down typically never cancels. That's a major long-term cost difference.
FHA loan limits apply in Marin County. If the purchase price exceeds that ceiling, FHA isn't an option regardless of your credit or down payment.
Strong credit and 10-20% down? Conventional wins. You get a lower rate, no lifelong MIP, and cleaner loan terms.
Credit in the 580-619 range or limited savings? FHA may be your only path to ownership in Novato. Just run the total cost — not just the rate.
First-time buyers often assume FHA is always cheaper. It isn't. At Novato price points, the MIP cost can erase the benefit of a lower rate.
Lenders require a 620 minimum. You'll need 740 or higher to access the best rates available.
On loans with less than 10% down, FHA MIP typically stays for the life of the loan. That's a significant cost difference versus conventional.
Yes. FHA sets county-specific loan limits. Marin County's high prices mean some homes may exceed the FHA ceiling entirely.
No. FHA requires owner occupancy. Conventional loans work for investment properties; FHA does not.
It depends on your credit and down payment. Conventional with 20% down eliminates MIP, often making it cheaper long-term despite similar rates.
You can refinance out of FHA into a conventional loan once you have sufficient equity. That removes the MIP requirement.