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in Grass Valley, CA
Most Grass Valley buyers choose between conventional and FHA financing. Your credit score and down payment decide which path costs less.
Conventional loans reward strong credit with better rates and no mortgage insurance after 20% equity. FHA accepts lower scores but charges insurance for life on most loans.
Conventional loans need 620 minimum credit, though 680+ gets you meaningful rate improvements. You can put down as little as 3%, but expect PMI until you hit 20% equity.
The big advantage shows up long-term: once you reach 20% equity, you drop PMI completely. On a $500k Grass Valley home with 10% down, that saves $200+ monthly once you cross that threshold.
FHA accepts 580 credit scores with 3.5% down, or 500-579 with 10% down. You'll pay 1.75% upfront mortgage insurance plus annual premiums that stick around for the loan's life on most purchases.
The real cost lives in that permanent insurance. On a $450k Grass Valley home, you're paying roughly $310 monthly in MIP that never goes away unless you refinance to conventional later.
Credit makes the biggest difference. With 720+ credit, conventional beats FHA on rate and total cost. Below 640 credit, FHA often approves deals conventional lenders won't touch.
Down payment flexibility matters less than you'd think—both allow 3-3.5%. The real gap is mortgage insurance: conventional lets you drop it, FHA doesn't.
Choose FHA if your credit sits below 640 or you need maximum approval flexibility. It'll cost more over time, but you can refinance to conventional once your credit improves and you've built equity.
Go conventional with 680+ credit and stable income. You'll pay less monthly after hitting 20% equity, and you avoid that permanent mortgage insurance drag. The higher credit requirement pays off in thousands saved.
Yes, refinance to conventional once you have 20% equity and 620+ credit. This eliminates monthly mortgage insurance permanently.
Both take similar timeframes, typically 25-35 days. FHA appraisals can add 3-5 days due to stricter property requirements.
Many do, since FHA appraisals scrutinize property condition more closely. Conventional offers face fewer inspection hurdles at closing.
740+ unlocks top-tier pricing. Each 20-point jump below that costs roughly 0.25% in rate.
Standard FHA requires move-in condition. Consider FHA 203k renovation loans for properties needing significant repairs.