Loading
in Sonoma, CA
Sonoma buyers typically choose between conventional and FHA loans based on down payment size and credit profile. Both get you into a home, but the costs and requirements differ sharply.
Your choice affects upfront cash, monthly payments, and how competitive your offer looks to sellers. We'll break down which loan makes sense for your situation.
Conventional loans require 3-20% down and credit scores typically above 620. You avoid government insurance if you put down 20% or more.
Monthly mortgage insurance drops off once you hit 20% equity. Rates vary by borrower profile and market conditions, but strong credit earns lower rates.
Sellers prefer conventional buyers because these loans close faster and have fewer appraisal complications. Your offer carries more weight in competitive Sonoma situations.
FHA loans accept 3.5% down with credit scores as low as 580. You pay both upfront and monthly mortgage insurance regardless of down payment size.
Monthly insurance stays for the loan's life if you put down less than 10%. The upfront premium adds 1.75% to your loan amount at closing.
These loans work well for first-time buyers or those rebuilding credit. Property condition matters more—FHA appraisers flag issues conventional appraisers often miss.
Down payment separates these loans least—both allow 3-3.5%. The real cost difference shows up in mortgage insurance and interest rates.
Conventional PMI costs 0.3-1.5% annually and cancels at 20% equity. FHA charges 0.85% monthly plus 1.75% upfront, lasting the loan's life with small down payments.
Credit requirements create the biggest approval gap. Conventional lenders want 620+ scores and lower debt ratios. FHA accepts 580 scores and allows higher debt-to-income levels.
Choose conventional if your credit exceeds 680 and you can put down 5% or more. You'll pay less monthly and gain seller preference in Sonoma's market.
FHA makes sense below 640 credit or when cash is tight for closing costs. Just factor lifetime insurance into your payment—it adds $200-300 monthly on typical Sonoma purchases.
Run both scenarios with actual numbers. A borrower with 5% down and 720 credit almost always pays less with conventional, even with PMI.
Yes, through refinancing once you hit 20% equity. You'll pay closing costs again but eliminate monthly FHA insurance.
Some do, especially on older homes needing work. FHA appraisals require repairs that conventional appraisals don't flag.
Conventional typically closes 3-5 days quicker. FHA appraisals take longer due to stricter property reviews.
740 or higher unlocks top-tier pricing. Each 20-point drop below that costs about 0.25% in rate.
Only if it's your primary residence. FHA doesn't allow investment properties or second homes in wine country.