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in Nevada City, CA
Nevada City buyers face a real choice between conventional and FHA financing. Your credit score, down payment, and how long you plan to stay determine which saves you money.
Most borrowers qualify for both loan types. The difference comes down to upfront costs versus long-term expense. One program gets you in cheaper, the other costs less over time.
Conventional loans require 620+ credit and 5% down minimum. Put down 20% and you avoid PMI entirely—no monthly mortgage insurance eating into your budget.
Rates run lower than FHA for borrowers with 700+ credit scores. The loan limits hit $806,500 in Nevada County, covering most properties in Nevada City's market.
FHA accepts 580 credit scores with 3.5% down. That's $14,000 on a $400,000 Nevada City home versus $80,000 for conventional with 20% down.
You'll pay 1.75% upfront mortgage insurance plus 0.55-0.85% annually. The monthly insurance stays for the loan's life unless you refinance or put 10%+ down initially.
Down payment splits these loans hardest. FHA's 3.5% gets you in sooner but chains you to mortgage insurance. Conventional's 20% down costs more upfront but eliminates that monthly drain.
Credit requirements matter more than most realize. Above 700 credit, conventional usually wins on rate. Below 680, FHA often beats conventional's pricing—and it'll actually approve scores conventional lenders reject.
Take FHA if you're under 680 credit or can't hit 10% down. The lower barrier gets you into Nevada City's market years earlier. Just plan to refinance to conventional once you build equity and boost your score.
Choose conventional with 700+ credit and 10%+ down payment ready. You'll pay less monthly and own the option to drop PMI. For Nevada City's pricier historic homes, that monthly savings compounds fast.
Yes, FHA 203(k) renovation loans work well for Nevada City's older homes. You can finance purchase and repairs in one loan with the same 3.5% down.
On a $400,000 FHA loan, expect $220-280 monthly for mortgage insurance. That's $2,640-3,360 annually you can't eliminate without refinancing.
Most lenders approve 620, but you'll get punished on rate. Hit 700+ to access conventional's best pricing and make it worth choosing over FHA.
Absolutely. Conventional loans have no property age restrictions. Appraisers just need to confirm the home meets current safety and structural standards.
Once you hit 20% equity and 680+ credit, run the numbers. Closing costs need to be offset by removing that permanent FHA mortgage insurance.