HOME LOANS IN CALIFORNIA
Welcome to the Golden state, home of the Beach Boys!
Types of mortgages
A conventional loan is a type of mortgage that is not guaranteed by the government, offering both fixed and variable interest rates. Typically requiring a down payment of 3% or more and a credit score of at least 620, it’s often considered the standard in home financing. These are available at Dwell Mortgage.
A renovation loan is a specialized type of financing designed to cover both the cost of purchasing a property and the expenses associated with improving it. These loans are ideal for homebuyers or homeowners who wish to renovate an existing property but don’t have the upfront funds. Typically, the loan amount is based on the projected value of the property after the improvements are made. Renovation loans come with varying terms, interest rates, and qualification criteria, depending on the lender and the scope of the renovation project. We offer FHA, VA and Conventional options for renovation loans.
FHA, USDA, and VA loans are government-backed mortgage options designed to assist different groups of homebuyers. FHA loans are ideal for first-time buyers or those with low credit, offering lower down payments. USDA loans target rural homebuyers and usually require no down payment but come with income and property restrictions. VA loans are exclusively for military personnel and veterans, offering no down payment and competitive interest rates. Each loan type has unique benefits tailored to specific needs. These are available at Dwell Mortgage.
Construction loans can be short-term, interim loans used for financing the building of a new home or a significant renovation project. Unlike traditional mortgages, construction loans cover the cost of building a new structure before refinancing into a standard mortgage. Typically, the lender disburses money in stages, coinciding with various phases of the construction process. Interest rates can be variable and are usually higher than traditional mortgage rates. We offer both short term construction loans and “All In” loans that cover both the construction period and the traditional loan period after completion.
A jumbo mortgage, also called a “non-conforming” loan is a type of home loan that exceeds the conforming loan limits set by federal agencies. Unlike conventional loans, jumbo loans are not backed by government-sponsored entities and typically come with stricter qualification criteria, including higher credit scores and larger down payments. They are designed for high-value properties and are subject to varying loan limits depending on the state and county. These are available at Dwell Mortgage.
HOME LOAN GUIDE
Determine Your Budget
Summary: Before diving into the home-buying process, assess your financial situation to know how much you can afford. There are many good financial budgeting tools available. Be careful however as many will ask for your personal and financial information. Our...
Check Your Credit Score
Summary: A good credit score can significantly affect your mortgage rates, so make sure to review and improve it if needed. There are two types of credit “inquiries” a lender will typically offer. We offer both and it’s important to...
Research Mortgage Options
Summary: There are various types of home loans. Make sure to choose the one that fits your needs. The most basic and common options most borrowers use are FHA, USDA, VA and Conventional loans. We break down the key options...
Get Pre-Approved for a Loan
Summary: There are two types of pre-purchase options you have when getting qualified to buy a home. A pre-qualification and a pre-approval. Pre-qualifications give you a basic understanding of your financial picture but often leave out key details that can...
Find a Real Estate Agent
Summary: A knowledgeable agent can help you find a home that meets your criteria and budget. Although it’s tempting to look at homes prior to getting pre-approved our team highly recommends choosing your agent AFTER getting pre-approved. Interview several agents...
Start House Hunting
Summary: Once you know what you’re looking for, start visiting properties and neighborhoods. There are great tools available online to help research the best neighborhoods and cities to potentially move to. Your real estate agent and Dwell Mortgage team will...
Make an Offer
Summary: Once you find a home you like, your agent and Dwell Mortgage team will help you make a competitive offer based on market conditions. Remember to discuss “Contingencies” with your agent so your offer is as aggressive as it...
Home Inspection and Appraisal
Summary: These are crucial steps to ensure you’re making a wise investment. The inspection will always come before the appraisal and can be done prior to making your offer or in the first few days after an offer is accepted....
Close the Deal
Summary: This is the final step where all the legal and financial processes come to completion. Although this sounds simple, there is quite a bit of complexity to “closing the deal”. A typical purchase transaction takes 30 days or less....
There are many components to a mortgage. Reach out to your Dwell Mortgage team member to get all of your questions answered.
How does a mortgage work when buying a house?
A mortgage is a type of loan specifically designed to purchase real estate. When buying a house, you’ll likely take out a mortgage if you can’t pay the full price upfront. Here’s how it works:
Application & Approval: You apply for a mortgage through a bank or other financial institution. They evaluate your creditworthiness and, if approved, determine the loan amount, interest rate, and terms.
Down Payment: You’ll usually need to make an initial payment known as a down payment, which is a percentage of the home’s price.
Monthly Payments: You agree to make regular payments over a set period, usually 15 to 30 years. These payments cover the loan’s principal and interest.
Property Taxes & Insurance: Often, the lender will include property taxes and homeowners insurance in the monthly payments, storing this money in an escrow account until payments are due.
Ownership: Although you’re making payments on the loan, you own the house and can live in it, sell it, or rent it out.
Final Payment: Once you’ve made all payments, the house is yours free and clear.
How do you qualify to buy a home?
Qualifying to buy a home involves several key steps and considerations:
Credit Score: A good credit score is crucial for qualifying for a mortgage. The better your score, the better the interest rates you’ll be eligible for.
Income & Employment: Stable income and employment history will make you a more attractive borrower. Lenders often require proof of income and employment stability.
Debt-to-Income Ratio: This ratio measures your monthly debts against your monthly income. A lower ratio is better as it signifies you have the financial room to take on a mortgage.
Down Payment: You’ll need to save for a down payment, which is a percentage of the home’s total cost. The exact amount varies, but 20% is often cited as a standard. Some mortgage programs allow as little as zero (0%) down.
Pre-Approval: Before house hunting, get a mortgage pre-approval to understand how much you can afford and show sellers that you’re a serious buyer.
Location and Market: Understand the housing market in the area where you want to buy. Some locations may have specific requirements or benefits for homebuyers.
Professional Help: Consult with real estate agents, Dwell Mortgage , and possibly lawyers to navigate the complex process of home buying.
How much of a mortgage can I get approved for?
The amount of mortgage you can get approved for depends on several factors:
Credit Score: A higher credit score could make you eligible for a larger mortgage loan with more favorable terms.
Debt-to-Income Ratio: Lenders look at this to ensure you can handle the mortgage payments. A lower ratio is more favorable.
Employment History: Stable employment and a consistent income stream can increase the amount you’re approved for.
Down Payment: The more you can put down upfront, the less you’ll need to borrow, which can increase your chances of approval for a larger loan.
Interest Rates: Current market rates will also influence how much you can borrow. Lower rates mean lower monthly payments, which could enable you to borrow more.
Loan Types: Different types of mortgage loans have different limitations, so the amount may vary based on the loan type you choose (e.g., FHA, VA, conventional).
Consulting with a mortgage advisor or lender can give you a more precise understanding tailored to your financial situation.
What kind of credit score do you need to buy a house?
The credit score needed to buy a house can vary depending on the lender and the type of loan you’re applying for. However, here’s a general guide:
Excellent (760 and above): You’ll likely get the best interest rates and terms.
Good (700-759): You should still be able to secure a loan, but perhaps not with the best interest rates.
Fair (650-699): You may face higher interest rates and may need a larger down payment.
Poor (600-649): You’ll find it challenging to get approved for a traditional mortgage. Consider FHA loans which have lower requirements.
Bad (Below 600): You’ll likely need to take steps to improve your credit before applying for a mortgage.