Question 1

What's the monthly payment on a $750,000 conventional loan in Morro Bay?

Accepted Answer

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.

Question 2

Do I need 20% down to avoid PMI on a conventional loan?

Accepted Answer

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.

Question 3

What credit score do I need for a conventional loan in Morro Bay?

Accepted Answer

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.

Question 4

How long does it take to close a conventional loan in San Luis Obispo County?

Accepted Answer

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.

Question 5

Can I pay off a conventional loan early without penalty?

Accepted Answer

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.

Conventional 30-year fixed mortgages in Morro Bay at 5.875%