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in Fort Bragg, CA
Fort Bragg buyers face a real choice between conventional and FHA financing. Both work on the Mendocino coast, but the right pick depends on your down payment and credit profile.
Conventional loans reward strong credit with lower long-term costs. FHA loans open doors for buyers with smaller down payments or credit scores in the 580-620 range.
Most Fort Bragg buyers I work with end up in one of these two camps. Your finances will make the decision obvious once you see the numbers side by side.
Conventional loans require 620+ credit and at least 3% down. Put down less than 20% and you'll pay PMI until you hit 20% equity, but that insurance drops off automatically.
Rates run lower than FHA for buyers with 680+ credit scores. You avoid the lifetime mortgage insurance that FHA charges on most loans.
Fort Bragg's coastal properties qualify as long as they meet standard appraisal requirements. No special restrictions on older homes or unique construction if the property appraises clean.
FHA accepts 580 credit scores with 3.5% down. Drop below 580 and you need 10% down, but approval is still possible.
You'll pay upfront mortgage insurance of 1.75% at closing plus annual premiums of 0.55%-0.85%. That annual insurance stays for the life of most loans unless you put down 10% or more.
Fort Bragg properties must meet FHA safety standards during appraisal. Peeling paint, roof issues, or broken railings kill deals until repairs happen.
Credit score creates the biggest cost gap. A 640 score pays roughly the same rate on FHA as conventional, but 700+ credit saves significant money going conventional.
Mortgage insurance works differently and matters more than most buyers realize. Conventional PMI drops off at 20% equity, saving you $150-300 monthly at that point.
FHA charges that annual premium forever unless you refinance. On a 30-year loan, that's $54,000-108,000 in extra payments compared to conventional.
Down payment requirements look similar at 3-3.5%, but FHA demands that upfront insurance fee. Conventional lets you avoid that initial hit if you're cash-tight at closing.
Choose FHA if your credit sits between 580-680 or you need maximum flexibility on credit issues. The higher insurance costs hurt long-term, but getting approved matters more than optimizing rates.
Go conventional with 680+ credit and 5%+ down payment. You'll pay less monthly and save tens of thousands over the loan term once PMI drops.
Fort Bragg's older housing stock tilts slightly toward conventional. FHA appraisers flag cosmetic issues that conventional appraisers often overlook, killing deals or forcing repair negotiations.
Plan to refinance FHA within 3-5 years if your credit improves. Switching to conventional eliminates that lifetime insurance drag and resets your cost structure.
Around 680+ credit tips the math toward conventional. Below that, FHA rates compete even with the insurance costs.
Only if you put 10%+ down originally and reach 78% loan-to-value after 11 years. Otherwise it stays for life unless you refinance.
Yes, but FHA appraisers scrutinize weather damage and deferred maintenance more strictly. Older coastal homes sometimes need repairs to pass FHA standards.
Plan on $54,000-108,000 extra depending on loan size. That annual premium adds up fast compared to conventional PMI that cancels.
Conventional handles quirky older properties more smoothly. FHA appraisers flag issues like worn paint or aging roofs that don't affect conventional deals.
Smart move if your credit needs work. Build equity and improve your score, then refinance to drop that lifetime insurance within 3-5 years.