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in Windsor, CA
Windsor buyers face a choice between conventional and FHA financing. Each loan type has different rules for down payments, credit scores, and ongoing costs.
Most first-time buyers lean toward FHA for the lower down payment. Repeat buyers with equity often save more with conventional loans that drop mortgage insurance.
Conventional loans require stronger credit—typically 620 minimum, though 740+ gets you the best rates. You can put down as little as 3%, but you'll pay PMI until you hit 20% equity.
PMI costs 0.3% to 1.5% annually based on your down payment and credit score. Once you reach 20% equity through payments or appreciation, PMI drops off completely.
Conventional loans work well for Windsor buyers with solid credit and some savings. You face stricter income verification but get more flexibility on property types and loan amounts.
FHA loans accept credit scores as low as 580 for 3.5% down. You pay an upfront mortgage insurance premium of 1.75%, plus annual MIP of 0.55% to 0.85% that lasts the life of the loan.
The upfront premium gets rolled into your loan amount. Annual MIP never drops off unless you refinance to conventional later, even after you build 20% equity.
FHA works for Windsor buyers with limited savings or past credit issues. The government backing lets lenders approve borrowers who wouldn't qualify for conventional financing.
Credit requirements create the biggest split. Conventional needs 620+ while FHA goes as low as 580. That 40-point gap opens homeownership to buyers rebuilding credit after financial setbacks.
Mortgage insurance works differently between programs. Conventional PMI costs more monthly but disappears at 20% equity. FHA MIP costs less but never drops off—you're stuck refinancing to remove it.
Down payment amounts look similar at 3% versus 3.5%. But FHA's upfront premium adds another 1.75% to your loan balance, increasing your total borrowing cost from day one.
Choose FHA if your credit sits below 640 or you've had recent financial problems. The easier approval standards matter more than the permanent mortgage insurance when you wouldn't qualify for conventional anyway.
Go conventional if your credit exceeds 680 and you can handle slightly higher short-term costs. You'll save thousands over 5-7 years once PMI drops off, especially in Windsor where home values typically appreciate.
Run the numbers both ways. FHA looks cheaper monthly but costs more over time. Conventional costs more upfront but saves significantly once you build equity through payments or appreciation.
Yes, you can refinance to conventional once you build 20% equity and your credit improves. This removes the lifetime mortgage insurance FHA requires.
FHA typically has lower monthly payments initially due to cheaper mortgage insurance. Conventional becomes cheaper after PMI drops at 20% equity.
Conventional approves more condo projects than FHA. FHA requires HOA approval while conventional offers more flexibility on condo financing.
740+ credit scores qualify for the lowest conventional rates. Each 20-point drop below 740 increases your interest rate slightly.
FHA loan limits in Sonoma County are $766,550 for single-family homes. Conventional conforming loans go higher at $806,500 for standard properties.