Loading
in Cotati, CA
Cotati buyers usually choose between conventional and FHA financing. Your credit score, down payment savings, and property type determine which loan actually works.
Both loans close deals in Sonoma County every week. The right choice depends on your financial profile, not which loan sounds better on paper.
Conventional loans require 620+ credit and typically 3-5% down. You avoid mortgage insurance faster than FHA—once you hit 20% equity, it drops off automatically.
These loans work for single-family homes, condos, and investment properties. Lenders approve loan amounts up to conforming limits without government insurance premiums eating into your budget.
FHA loans accept 580 credit scores with 3.5% down. You pay an upfront insurance premium of 1.75% plus annual premiums for the loan's life on most purchases.
Sellers can contribute up to 6% toward closing costs—double what conventional allows. This matters in Cotati where your cash might stretch across down payment and repairs.
Credit score creates the clearest split. Below 620, you need FHA. Above 680 with 5%+ down, conventional usually costs less monthly due to lower insurance.
FHA charges 1.75% upfront plus 0.55-0.85% annually in mortgage insurance. Conventional PMI runs 0.3-1.5% annually but cancels at 20% equity. On a 30-year loan, that difference adds up.
Property standards differ too. FHA requires repairs conventional lenders ignore—peeling paint, cracked sidewalks, missing handrails. This kills some Cotati fixer deals before they start.
Choose FHA if your credit sits between 580-680 or you're stretching to cover down payment and closing costs. The seller concession room helps when cash runs tight.
Pick conventional with 680+ credit and 5%+ down payment saved. You'll pay less in insurance over time and avoid FHA's property condition requirements that complicate older Cotati homes.
Run the numbers both ways. A borrower with 650 credit and 5% down might save $80 monthly with conventional despite slightly higher rates—PMI costs that much less than FHA insurance.
Yes, through refinancing once you hit 20% equity and your credit improves. You'll need to qualify under conventional guidelines at that time.
Both take 30-45 days typically. FHA adds a property appraisal review step, but timeline differences are minimal with experienced lenders.
Some do, fearing FHA appraisal issues. A strong offer with FHA beats a weak conventional offer—price and terms matter more than loan type.
740+ unlocks top-tier pricing. Each 20-point drop below that costs roughly 0.25-0.5% in rate or higher fees.
Only if the complex is FHA-approved. Many Sonoma County condos aren't on the approved list, limiting your options to conventional.