The questions people ask a mortgage broker

It depends on the program, and any figure printed here is a guess about somebody else's file. VA and USDA ask for the least of your own money up front. FHA and conventional sit in the middle, and which of them asks for less depends on your file and the house. Jumbo lenders each set their own requirements. Once you apply, the lender's Loan Estimate puts an estimate in writing before you commit to the loan.

More than the down payment. Earnest money goes into escrow when your offer is accepted and is credited to you if the purchase closes. The appraisal is ordered by the lender and paid for by you, and inspections are your choice and worth making. Closing costs cover the lender, title, escrow, recording and notary, and prepaid items cover the first year of homeowners insurance plus the taxes and insurance collected ahead. Every one of these depends on the house, the program and the lender.

Yes. The California Housing Finance Agency, CalHFA, runs the MyHome Assistance Program, a deferred-payment junior loan toward the down payment or closing costs, and ZIP, which pairs with its CalPLUS loans toward closing costs. MyHome requires a first-time buyer, which CalHFA defines by how long it has been since you last owned and occupied a home, and CalHFA's programs carry income limits that vary by county and change.

It can. FHA, VA and conventional loans all allow a gift from a family member toward what you put in on a home you will live in, and each program has its own rule about who may give it and how it is documented. Underwriting will want a gift letter and a paper trail showing where the money came from and that it is not a loan in disguise. Tell us about a gift early.

Because the number is yours and not the program's. Federal advertising rules treat a stated down payment as a trigger that obliges the page to also state the full repayment terms and the annual percentage rate, and this site publishes no rates, so a number here would be either a guess or a violation. The real figure depends on the program, your credit, the house and the lender. Once you apply, the lender's Loan Estimate puts an estimate of it in writing.

An FHA loan is a mortgage insured by the Federal Housing Administration, part of HUD, and made by an FHA-approved lender. It can suit a buyer whose credit file is thin or recently repaired, because FHA publishes its own decision score tiers and can accept other credit records where there is no score. It carries mortgage insurance both up front and annually, the home has to be your primary residence and meet FHA's property requirements, and a 203(k) option finances a house that needs work together with the work itself.

A VA loan is guaranteed by the U.S. Department of Veterans Affairs for veterans, active-duty service members and some surviving spouses, and the first step is a Certificate of Eligibility. There is no VA loan limit for a veteran with full entitlement, no monthly mortgage insurance, and a one-time funding fee that is waived for a veteran receiving VA compensation for a service-connected disability. The home has to be your primary residence. Vandenberg Space Force Base and Camp San Luis Obispo are both in our service area.

A conventional loan is one no government agency insures or backs, and a conforming conventional loan is underwritten to Fannie Mae and Freddie Mac guidelines. It works for a primary residence, a second home or an investment property, and for one to four units, though a second home is limited to one unit. Private mortgage insurance applies while the loan is large against the home's value, and on a one-unit home you live in, the Homeowners Protection Act, subject to its conditions and exceptions, gives you the right to ask for borrower-paid mortgage insurance to be canceled once the loan is paid down far enough against the home's original value, and requires it to end automatically at a later point on the loan's amortization schedule. A loan above the conforming limit for San Luis Obispo County is not conventional conforming but jumbo.

A jumbo loan is any loan above the conforming limit for the county the home is in, which means Fannie Mae and Freddie Mac cannot buy it and its guidelines are set outside the agency programs. Reserves, documentation, appraisal practice and property rules can differ from one jumbo lender to the next, so one lender's no does not by itself decide the next lender's answer.

The California Housing Finance Agency is a state agency that does not lend directly: its loans are made through CalHFA-approved lenders. Its first-mortgage programs include CalHFA FHA, CalPLUS FHA, CalHFA Conventional, CalPLUS Conventional and Dream For All Conventional, and its assistance includes the MyHome Assistance Program, a deferred-payment junior loan, and ZIP, the Zero Interest Program, paired with CalPLUS toward closing costs. MyHome requires a first-time homebuyer, which CalHFA defines as not having owned and occupied a home in the past three years, a first-time buyer using any CalHFA program takes homebuyer education, and CalHFA sets income limits by county. Dream For All opens in limited rounds and is not available on demand.

A USDA loan is made through an approved lender under the Section 502 Single Family Housing Guaranteed Loan Program of USDA Rural Development. The home has to be in an eligible rural area, which USDA's own eligibility map shows address by address, with USDA making the final determination on a complete application, and parts of San Luis Obispo County qualify. Every adult household member's income counts toward a ceiling set from the county's median household income, the home has to be your primary residence, and there is an up-front guarantee fee and an annual fee. The address is the first thing to check.

CalVet Home Loans is run by the California Department of Veterans Affairs, and the program dates from 1921, and it is a state program separate from the federal VA loan. It finances the home as a contract of purchase, under which CalVet holds title to the property until the contract is satisfied, which is worth knowing before you choose it. Eligibility starts at ninety days of active duty with a discharge under honorable conditions, and there is no California residency requirement. We do CalVet loans as well as VA loans, so your loan officer can set the two side by side for your file.

An adjustable-rate mortgage holds its rate at an agreed figure for an opening period, then adjusts on a schedule tied to a published index plus a margin. Caps limit how far the rate can move at the first adjustment, at each later one, and across the life of the loan. It can suit a borrower who does not expect to keep the loan long, and the risk is that plans change and the rate rises. A lender still has to qualify you under the ability-to-repay rule, and the opening period, the index, the margin and the caps are disclosed in writing before you commit.

No. A rate on a web page is a rate for nobody's file: the one you are offered depends on the program, your credit, the loan size, the property and the day, and federal advertising rules require a published rate to be stated as an annual percentage rate, with more disclosures in some cases, which a brochure page cannot keep accurate for every file. Call us and we can price your actual file with the lenders on our panel. If you have been quoted a rate elsewhere, our calculators will take it and show you what it does to the payment.

No, and the difference matters when you write an offer. A pre-qualification is our read of what you have told us about your income, your debts and your credit, and any letter your loan officer can write from it after the call. An approval is a lender's underwriting decision on a verified file, and it comes later, from the lender, once your documents and the property have been reviewed. Nothing on this site is underwritten, so a letter from us can only be a pre-qualification.

Yes. Conventional loans allow an investment property, and self-employed income is documented from your tax returns rather than excluded, which takes more paper and not a different program. When the returns do not tell the story, a bank statement loan qualifies you on your deposits, and a rental can be financed on its own rent with a DSCR loan, both outside the agency programs. If your file needs something outside the programs we work with, ask us whether we can place it.

Escrow opens and your earnest money goes in. The lender orders the appraisal while underwriting reads your documents and comes back with conditions, which are requests for more paper or an explanation. When every condition is cleared the lender issues a clear to close, you receive the Closing Disclosure with the final figures, and you sign at escrow with a notary. The lender then funds the loan, the deed records with the county, and possession follows the terms of your purchase contract.

Proof that your income is what you said and likely to continue, that the money for closing is yours and can be traced, that your debts are what the credit report shows, and that the house is worth the loan and in acceptable condition. In practice that means pay stubs, W-2s or tax returns, bank statements for the accounts the money comes from, and a written explanation for anything that looks odd, such as a large deposit or a gap in employment. None of it is a test. Answer what is asked, the same day if you can, and the file keeps moving.

Document requests that sit for a week, a large deposit nobody can explain, a new car or a new credit card opened mid-file, a job change, an appraisal that comes in under the price, and a surprise on the title. Some of these are avoidable, and all of them are easier to handle when we hear about them early.

The appraisal is an independent valuation of the house that the lender orders and you pay for, and on FHA and VA loans the appraiser also checks the condition of the property against the program's requirements. If the value comes in under the price, the loan is sized to the appraised value rather than the contract, and the gap is covered by renegotiating the price, by bringing more money, or by walking away under the appraisal contingency if your offer kept one or, on an FHA loan, under the amendatory clause FHA requires in the contract.

You sign the loan documents at the escrow office or with a mobile notary, with a government-issued photo ID in hand, and the money you are bringing to closing arrives by wire. Confirm wire instructions by phone with the escrow company on a number you already have before you send anything, because wire fraud targets exactly this moment. Signing is not the end: the lender funds after reviewing the signed package, the deed records, and only then is the house yours.

A loan officer here at the brokerage. Your loan officer is the person to call with any question about your file while the lender works on it.