Home Loan Options in California
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How to Choose a Home Loan Program
A home mortgage allows you to own real estate even if you don’t have enough funds to buy it up front. You can become an owner of your house already when you have funds for the first payment. You don’t have to wait for years until you collect enough money to buy your own place to live. This form of debt is the most advised because mortgage loan has a lower interest rate than any other type of debt.
A hard money loan is given to the borrower by private investors instead of banks or governmental organizations. A hard money loan is usually short-term – about 12 months, but can be extended to 2-5 years.
The lender of the money looks at the value of the property and not at the borrower’s credit score. A hard-money loan is suitable for those who need a loan for a shorter term and don’t want to go through the tedious procedure required by banks.
Not supported by the government. They feature a lower interest rate and a down payment of at least 3%. Ideally, you need to plan for a 20% downpayment to avoid mortgage insurance. Conventional loans typically cost less than government programs, so they are a good choice for those who have an excellent credit score and stable income.
Conforming conventional loans conform to the rules established by Federal Housing Finance Agency. The main of these criteria is the loan limit that changes from year to year. Interest rates depend on the size of the down payment and the credit.
Non-conforming loans don’t match the loan limits of the conforming loans. They usually require at least 20% down payment, and there is more scrutiny of the borrower’s credit profile.
FHA loan is insured by the Federal Housing Administration. This loan requires mortgage insurance. FHA loan combines relatively easy qualifying standards and a low down payment (3.5%)
FHA loans are ideal for first home buyers. You are not required to have perfect credit (580 or higher), and if you have at least 10% down payment, then your credit score could be 500.
You can use a government grant or a gift from family members as a down payment. Besides, because the lender takes less risk with this loan, you can have lower interest rates.
US Department of Veteran Affairs guarantees VA loans. Its most significant advantage is that it doesn’t require a down payment or mortgage insurance.
Service members, veterans, and eligible surviving spouses can apply for this type of loan. You must qualify in compliance with the VA loan guidelines for military personnel and present a certificate of eligibility to the lender.
You estimate what house you can afford based on your income, and then get pre-approved. VA will issue an appraisal of the property
A no-doc loan doesn’t require many supporting documents that prove the borrower’s income. The borrow needs to fill out a mortgage application and state monthly gross income.
The purpose of the loan is to make qualifying easier and faster for those whose income is difficult to verify, for example, self-employed persons or independent contractors.
The assessment of the loan is based on the resale potential of the property. The lenders expect borrowers to have high cash reserves and an excellent credit score.
Closing the loan usually costs thousands of dollars. You can avoid paying the closing costs if the lender will add them to your loan amount. What it means is that you will have to pay a higher interest rate over the life of your loan, but pay nothing at the closing of the loan.
If you plan to stay in your house for more than five years, then a higher mortgage rate will be less expensive than paying closing costs upfront.
A construction loan is used for financing
Construction loans usually have a higher interest rate and a down payment of at least 20%. The lender would also look at the list of the construction details.
How to Get a Mortgage in California
4 Easy Steps to Your Dream
Step 1 - Pre-Qualification
First of all, you need to get your credit in check and get preapproved for a mortgage. Various loan types require a different credit score, but the higher your credit score, the better terms on your mortgage loan you will get.
Step 2 - We Shop You Choose
Once you get pre-approved and know how much money the lender will let you borrow, you can look for the houses within your price range.
Step 3 - Start a Loan Program
Next step is looking at your mortgage options and choosing the one that fits you best.
Step 4 - Approval for a Loan Program
Apply for a Home Loan Program
If you plan to acquire a property in California, we will gladly assist you with making the right choice that will be the most beneficial for you, and
We offer a lot of home loan options for a first and second time home buyers, for people with low or high credit score, for military personnel and investors.