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in San Anselmo, CA
San Anselmo buyers face a choice most Marin County borrowers wrestle with: conventional or FHA financing. The right answer depends on your down payment, credit score, and how long you plan to stay.
Both loans work in San Anselmo, but they play by different rules. Conventional offers better long-term costs if you qualify. FHA gets you in with less cash upfront.
Most brokers push one or the other based on commission. We look at your full financial picture and show which loan actually saves you money over the life of the mortgage.
Conventional loans require at least 620 credit and typically 3-5% down, though you'll pay PMI below 20% down. These mortgages aren't government-backed, so lenders set stricter qualification standards.
The upside: PMI drops off once you hit 20% equity. Rates run lower for strong credit profiles. You avoid the upfront funding fee FHA charges.
If you have 680+ credit and can swing 5% down, conventional usually wins on total cost. The loan limits go higher too, which matters in Marin County's price range.
FHA loans accept 580 credit scores and just 3.5% down. The Federal Housing Administration insures these mortgages, so lenders take on less risk and approve more borderline files.
The catch: you pay 1.75% upfront mortgage insurance plus monthly MIP that never drops off on most loans. That's permanent, even after you hit 20% equity.
FHA works best when you need the lower credit threshold or can't save a larger down payment. It gets you into San Anselmo now rather than waiting two more years.
Credit score creates the biggest fork in the road. Below 640, FHA is usually your only option. Above 680, conventional saves thousands in insurance costs over time.
Down payment matters less than most buyers think. The 0.5% difference between 3.5% FHA and 3% conventional won't make or break the deal. Focus on the monthly insurance payment instead.
Mortgage insurance separates these two more than anything else. Conventional PMI runs 0.3-1.5% annually and cancels. FHA MIP runs 0.55-0.85% and stays forever on 30-year loans with less than 10% down.
Loan limits work the same for both in Marin County. The 2024 conforming limit is $766,550, so either loan handles most San Anselmo properties unless you're buying at the top of the market.
Choose FHA if your credit sits below 640 or you need the easier approval overlay. It's also smart if you plan to refinance within five years anyway, since the permanent insurance won't cost you much over a short timeline.
Choose conventional if you have 680+ credit and can handle 5% down. You'll pay less monthly and build equity faster without the permanent insurance drag.
Here's the math that matters: on a $700,000 San Anselmo home, FHA costs about $320/month more in mortgage insurance than conventional with 5% down. Over 10 years, that's $38,000 you don't get back.
Rates vary by borrower profile and market conditions. Run both options with actual numbers before deciding. Sometimes a slightly higher conventional rate still beats FHA because the insurance costs less.
Yes, you can refinance to conventional once you hit 20% equity and improve your credit. Most borrowers do this to drop the permanent FHA mortgage insurance.
Both close in 21-30 days typically. FHA requires an FHA-approved appraiser, which sometimes adds 2-3 days in Marin County, but it's rarely a deal-breaker.
Some San Anselmo sellers favor conventional because the appraisal standards are less strict. FHA appraisers flag minor repairs that can delay closing.
620 is the floor, but you'll get punished on rate below 680. The sweet spot for competitive pricing is 720 and above.
Yes, but you'll need reserves. Lenders want to see 2-6 months of mortgage payments in the bank after closing, depending on your credit and debt ratios.