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The SLO Land Conservancy just secured 750 acres for the Morro Bay-to-Cayucos connector trail, signaling real infrastructure investment in the area. A $937,500 home here with 20% down runs $4,437 monthly at 5.875% — well within reach for county earners.
Morro Bay's waterfront appeal and outdoor access draw buyers from across California. Conventional financing at this rate makes the math work for primary residence purchases in the $750K–$1M range.
5.875%
Interest Rate
$4,437
Monthly P&I
740+
FICO Required
$750,000
Loan Amount
20% ($187,500)
Down Payment
30 days
Lock Period
Conventional Loans in Morro Bay
Conventional loans in Morro Bay start at 620 FICO, but 740+ gets you the best rates and terms. You'll need 3–20% down; at 20% down, PMI disappears entirely. The county's median household income of $93,398 supports homes in the $550K–$700K range comfortably.
For a $937,500 purchase, lenders expect 20% down ($187,500), a 740+ credit score, and debt-to-income under 43%. Cash reserves of 2–3 months' payment strengthen your application. Self-employed borrowers may need 2 years of tax returns.
Local decision guide
Use this guide to connect conventional loans eligibility, lender expectations, and local market factors before comparing payment options in Morro Bay.
The SLO Land Conservancy just secured 750 acres for the Morro Bay-to-Cayucos connector trail, signaling real infrastructure investment in the area. A $937,500 home here with 20% down runs $4,437 monthly at 5.875% — well within reach for county earners.
Morro Bay's waterfront appeal and outdoor access draw buyers from across California. Conventional financing at this rate makes the math work for primary residence purchases in the $750K–$1M range.
Conventional loans in Morro Bay start at 620 FICO, but 740+ gets you the best rates and terms. You'll need 3–20% down; at 20% down, PMI disappears entirely. The county's median household income of $93,398 supports homes in the $550K–$700K range comfortably.
California's conventional market is split between retail banks and mortgage brokers. Retail lenders (Wells Fargo, Bank of America) move slower but offer in-person service. Brokers access multiple wholesale lenders and close faster — typically 21–28 days.
Agency loans (Fannie Mae, Freddie Mac) dominate the $750K range in San Luis Obispo County. Overlays are minimal for 740+ FICO borrowers. Expect appraisals to run 7–10 days; underwriting adds another 5–7 days.
Conventional pencils hard in Morro Bay above $700K where FHA's lifetime mortgage insurance becomes a drag. At $937,500 with 20% down, you're paying zero insurance and locking 5.875% — that's the sweet spot for this market.
The only reason to consider FHA here is if you're putting down less than 10%. Below that threshold, FHA's upfront mortgage insurance (1.75%) plus annual MIP compounds over 30 years. Conventional at 3% down costs less in total interest.
FHA loans run lower rates but tack on mortgage insurance that never cancels unless you refinance. At $937,500, that insurance compounds to real money over 30 years. Conventional at 20% down has no insurance and no rate penalty.
VA loans offer zero down for eligible veterans, but the funding fee (2.15% at zero down) gets rolled into the loan balance. Conventional's 20% down costs less upfront and avoids the funding fee entirely.
The SLO Transportation Tax ballot measure in November 2026 will fund road and transit improvements across the county. If passed, it signals long-term infrastructure investment that supports home values in Morro Bay and nearby coastal towns.
Righetti Hill open space just opened on San Luis Obispo's south side, adding public hiking access. Outdoor amenities like this drive buyer interest in the region and support appreciation over time.
At 5.875% on a $750,000 loan with 20% down, your principal and interest run $4,437 monthly. Add property tax, insurance, and HOA if applicable. The full scenario: $937,500 purchase, $187,500 down, 80% LTV, 740 FICO, 30-day lock, as of April 8, 2026.
Yes. At 20% down (80% LTV), PMI disappears entirely. Below 20%, PMI applies until you hit 78% LTV through principal paydown. At 20% down, there's no insurance cost and no rate penalty — it's the cleanest option.
Conventional loans start at 620 FICO, but 740+ gets you the best rates and terms. At 740, you qualify for the 5.875% rate shown here. Below 740, expect slightly higher rates or tighter underwriting.
Mortgage brokers typically close in 21–28 days. Appraisal takes 7–10 days; underwriting adds 5–7 days. Retail banks move slower, often 30–45 days. A 30-day lock gives you breathing room.
Yes. Conventional loans have no prepayment penalty. You can pay extra principal any month or refinance whenever rates drop. That flexibility is one reason conventional beats FHA at higher price points.