Mortgage Loans In California

For many Californians, there are so many barriers to purchasing a home or investing in real estate that it may seem like more trouble than it is worth. Often, potential home buyers are dissuaded from their interest in owning California real estate due to unreasonable interest rates and restrictive requirements. Fortunately, there are a variety of California mortgage loans that can help make homeownership a reality, even if you do not have a perfect credit score.

If you are buying a house in California, choosing a lender with your best interests in mind is critical. Griffin Funding offers consumer-oriented loan programs with competitive interest rates and flexible underwriting options including bank statement, FHA, and VA home loans.

Areas We Serve

Whether you’re looking to purchase a home on the coast, in the mountains, or anywhere in between, Griffin Funding provides loan services for California buyers all across the state, including:

Wherever you choose to invest, our loan officers can help you find a mortgage that suits your circumstances. Discover our favorable California mortgage programs today.

How Do Home Loans Work in California?

Home loans in California work more or less the same as those in other states, however the higher cost of real estate in the state is a factor that can impact your mortgage and how you approach investing.

Typically, the process is fairly straightforward. Once you find a home, you will need to apply for a loan through a lender of your choosing. You will then need to provide the requested information to determine if you can qualify for a home loan. Once you agree on the terms of the loan, it will be approved and finalized. At this point, you can move forward with buying a home.

Requirements to Buy a House in California

The requirements to buy a house in California are similar to anywhere else. For the most part, the requirements depend on the type of loan you’re applying for. Additionally, each lender has their own list of qualifications. Typically, requirements revolve around several key factors, such as:

Requirements to buy a house in California:

• A minimum credit score
• Income verification
• Down payment (ranging anywhere from no down payment to 20%)
• Debt-to-income (DTI) ratio (typically 43% or lower)
• Minimum/maximum loan amount (varies by loan type)

Traditional loans usually have strict requirements. However, Griffin Funding focuses on offering more flexible loan options that cater to investors, self-employed individuals, and first-time buyers.

California Mortgages Rates and Fees

To understand the true cost of your California mortgage, you should have an understanding of the various rates and fees associated with it.

Common mortgage-related fees you should expect are:

• Mortgage origination fee: The origination fee is what lenders charge to process your loan.
• Appraisal fee: This fee is paid to a third-party appraiser to provide their unbiased opinion about the current market value of the property you’re purchasing.
• Title search and insurance: This protects you and the lender from any future property ownership disputes or claims against the property.
• Recording fees: When a property switches ownership, it becomes public record. The recording fees are charged by your municipality to record the new property deed and mortgage.
• Real estate commission: Depending on what you’ve negotiated with the seller, these fees are usually 5-6% of the home’s sale price and are split between the buyer’s and seller’s agents.
• Escrow fees: This covers the cost of the third party that handles the money and documents during your transaction.

In addition to these one-time fees, you should understand what your California mortgage interest rate will be and how it will affect your monthly mortgage payment. There are several factors that influence how your mortgage rate is determined by lenders, such as:

• Credit score: Generally, scores above 740 qualify for the best rates, while scores below 680 may lead to higher rates or additional requirements.
• Down payment size: A larger down payment typically results in lower interest rates since it reduces the lender’s risk.
• Loan type: Different loans carry different base rates, with government-backed loans often offering more competitive rates.
• Property location: Different areas within California may have varying risk assessments that affect mortgage interest rates in California, particularly in high-cost markets like San Francisco or Los Angeles.
• Property use: Primary residences typically qualify for lower rates than investment properties or second homes.
• Current market conditions: Market factors and Federal Reserve policies can cause California mortgage rates to fluctuate daily.
• Loan term: Shorter terms (like 15-year mortgages) usually offer lower rates than longer terms (30-year mortgages) but require higher monthly payments.

If your current rate is too high, you can consider refinancing your mortgage down the road. Refinancing could save you substantially by lowering your payments and reducing how much you pay in interest over the life of the loan. In the long run, it could even save you thousands of dollars. After reviewing your current mortgage, one of our loan officers can help you determine whether refinancing is the best financial decision for you.

Our California Mortgage Programs

DSCR Loans in California: DSCR loans allow real estate investors to qualify for financing for long- or short-term rentals based on their debt service coverage ratio (DSCR) rather than through traditional means. By calculating the DSCR, mortgage lenders in California can measure a potential borrower’s operating income in relation to their mortgage debt, and thus determine whether they will be able to repay a loan. DSCR loans are one of many types of California investment property loans.

Asset-Based Loans in California: When you take out an asset-based loan, you’re borrowing against the value of your assets. The more valuable your assets are, the more financing you can receive. This enables borrowers to tap into the equity of their assets and access financing.

Bank Statement Loans in California: These loans allow you to qualify for a mortgage with your bank statements instead of the income verification methods required for traditional home loans. This option is typically advantageous for self-employed individuals whose W2’s do not accurately reflect their income. Bank statement loans are one of many types of California self-employed mortgages available to business owners.

Home Equity Loans: If you own your property in California and you have built up equity in your home, you may benefit from a second mortgage where you can turn the equity into cash for other things without changing the rate on your first mortgage. Home equity lines of credit (HELOC) are also available to California homeowners.

FHA Loans for First-Time Home Buyers: An FHA loan is recommended for buyers who do not have funds available for a large down payment. Since these loans are insured by the FHA (Federal Housing Administration), you can buy a house with as little as 3.5% down.

CalHFA Loans: California offers a unique loan program for low-to-moderate-income borrowers who are also first-time home buyers. This loan offers a 30-year fixed rate for those who qualify.

VA Home Loans: Qualifying active-duty service members, veterans, and surviving spouses can take advantage of the home loan benefits afforded by the Department of Veteran Affairs. Because these loans are insured by the VA, you can secure much lower rates and even forgo a down payment.

USDA Home Loans: Depending on where you want to buy a home in California, you may be able to apply for a USDA mortgage. These loans are reserved for homes in qualifying rural areas.

ITIN Loans: A California ITIN loan can help foreigners without a Social Security number (SSN) become homeowners or real estate investors in the Golden State.

Private Money Loans: Also known as a hard money loan, a private money loan is an alternative financing option provided by private individuals or organizations. These loans offer faster closing times and more flexible qualification requirements than traditional CA mortgages, making them ideal for real estate investors or those who may not qualify for traditional financing.

Speak with one of our loan officers today to determine which of our California home loans best suits your needs.

Apply for a California Home Loan

Buying a home in California is easier than ever with the assistance of a Griffin Funding loan officer who can help you qualify for a mortgage tailored to your needs. Our application process is stress-free and we can often complete the California home loan process within 30 days so that you do not miss out on the home of your dreams. Contact our San Diego Corporate office or our branch office in Laguna Niguel.

Get pre-approved online or request a free quote today!