Mortgage FAQ & Loan Questions Answered

For 2025, FHA loan limits in most California counties range from $498,257 to $1,149,825. In high-cost areas like Los Angeles and Orange County, the limit is $1,149,825. Riverside and San Bernardino counties have a limit of $766,550. These limits are updated annually based on local median home prices.

The minimum credit score for an FHA loan with 3.5% down payment is 580. If your credit score is between 500-579, you'll need to put down 10%. Many California lenders prefer scores of 620+ for the best rates and terms.

FHA loans require as little as 3.5% down payment if your credit score is 580 or higher. For a $600,000 home (typical in California), that's $21,000 down payment. You can use gift funds from family members for your down payment and closing costs.

Yes, you can use FHA loans to purchase condominiums in California, but the condo project must be FHA-approved. Many California condo complexes are on the FHA approved list. Your lender can verify if a specific condo project is eligible.

California's Proposition 13 limits property tax increases to 2% per year, which helps keep your mortgage payments predictable over time. This is especially beneficial for FHA borrowers who plan to stay in their homes long-term, as property taxes won't increase dramatically.

California offers several programs that work with FHA loans: CalHFA MyHome Assistance Program (up to $10,000), California Dream For All Program (up to 20% assistance), and local city/county programs. These can significantly reduce your out-of-pocket costs.

For 2025, VA loan limits in California vary by county. High-cost areas like Los Angeles, Orange, and San Francisco counties have no limit for veterans with full entitlement. Veterans with partial entitlement have limits ranging from $498,257 to $1,149,825 depending on the county.

No, VA loans do not require a down payment, even in high-cost California markets. You can purchase a home with $0 down, making homeownership more accessible for veterans and active military in expensive California housing markets.

The VA funding fee for 2025 ranges from 1.25% to 3.3% of the loan amount, depending on your down payment and whether it's your first VA loan. Veterans with service-connected disabilities rated at 10% or higher are exempt from the funding fee.

Yes, VA loan benefits can be reused. If you sell your home and pay off the VA loan, your entitlement is restored. You can also have multiple VA loans simultaneously if you have remaining entitlement and sufficient income to qualify.

While the VA doesn't set a minimum credit score, most California lenders require a score of 620 or higher. Some lenders may work with veterans who have scores as low as 580, especially with compensating factors like stable income or significant assets.

Yes, you can use a VA loan to purchase up to a 4-unit property in California, as long as you live in one of the units as your primary residence. This is a great way to build wealth through real estate investment while using your VA benefits.

California offers several first-time buyer programs in 2025: CalHFA MyHome Assistance (up to $10,000), California Dream For All (up to 20% down payment assistance), FHA loans with 3.5% down, VA loans for veterans, and local city/county programs with additional assistance.

For California first-time buyers, you typically need 3-20% down payment plus 2-3% for closing costs. With FHA loans, you need as little as 3.5% down. For a $600,000 home, that's $21,000 down plus $12,000-$18,000 for closing costs. Down payment assistance programs can help reduce these amounts.

Most California lenders require a minimum credit score of 580-620 for first-time buyers. FHA loans accept scores as low as 580 with 3.5% down. Conventional loans typically require 620+. VA loans for veterans often accept 580+. Higher scores get better rates and terms.

Yes, you can buy a house with student loan debt. Lenders will include your student loan payments in your debt-to-income ratio calculations. Income-driven repayment plans can help lower your monthly obligations, improving your qualifying ratios for a mortgage.

Closing costs in California typically range from 2-3% of the home's purchase price. For a $600,000 home, expect $12,000-$18,000. This includes loan fees, title insurance, escrow fees, recording fees, and prepaid items. Some programs offer closing cost assistance for first-time buyers.

The California home buying process typically takes 30-45 days from accepted offer to closing. Pre-approval takes 1-3 days, house hunting varies, and escrow is usually 30 days. Getting pre-approved before house hunting speeds up the process significantly.

For 2025, conventional loan limits in California range from $498,257 in most counties to $1,149,825 in high-cost areas like Los Angeles, Orange, and San Francisco counties. Loans above these limits are considered jumbo loans with different requirements.

Conventional loans typically require 5-20% down payment. With 20% down, you avoid private mortgage insurance (PMI). Some programs allow as little as 3% down for first-time buyers, though PMI will be required until you reach 20% equity.

Most California lenders require a minimum credit score of 620 for conventional loans. For the best rates and terms, aim for 740+. Scores between 620-739 may qualify but with higher rates or additional requirements.

Private Mortgage Insurance (PMI) for California conventional loans typically costs 0.3% to 1.5% of the loan amount annually, depending on your credit score and down payment. For a $600,000 loan, PMI could range from $150-$750 monthly. PMI automatically cancels at 78% loan-to-value ratio.

Yes, conventional loans can be used for California investment properties, but require higher down payments (typically 20-25%) and higher credit scores (usually 720+). Investment property rates are typically 0.125-0.375% higher than owner-occupied rates.

Conforming loans meet GSE (Fannie Mae/Freddie Mac) guidelines and loan limits. In California, this means up to $1,149,825 in high-cost areas. Non-conforming or jumbo loans exceed these limits and have different requirements, typically higher credit scores and larger down payments.

Jumbo loans in California start at $1,149,826 in high-cost counties (Los Angeles, Orange, San Francisco) and $498,258 in other counties. There's no upper limit, but loans over $2-3 million may require additional documentation and higher down payments.

California jumbo loans typically require 10-20% down payment, though some lenders offer programs with as little as 5% down for highly qualified borrowers. Larger down payments (20%+) often result in better rates and terms.

Most California jumbo loan lenders require a minimum credit score of 700-720. For the best rates, aim for 740+. Some lenders may work with scores as low as 680 with compensating factors like large down payments or significant assets.

Jumbo loan rates in California are typically 0.125-0.25% higher than conforming loan rates, though this gap has narrowed in recent years. With excellent credit and large down payments, jumbo rates can sometimes be competitive with or even lower than conforming rates.

California jumbo loans require extensive documentation: 2 years tax returns, pay stubs, bank statements, asset verification, employment verification, and debt documentation. High-net-worth borrowers may also need to document investment accounts and other assets.

Yes, jumbo loans can be used for condos (if the project meets lender requirements) and investment properties in California. Investment properties typically require 25-30% down and higher credit scores. Condo purchases may have additional project approval requirements.

Consider refinancing when rates drop 0.5-1% below your current rate, when your home value has increased significantly, when your credit has improved, or when you want to eliminate PMI. California's appreciating home values often create good refinancing opportunities.

California refinance rates vary daily but are typically within 0.125% of purchase rates. 30-year fixed rates for well-qualified borrowers are generally in the 6-7% range. Shop multiple lenders as rates can vary significantly between lenders.

California refinance costs typically range from 2-5% of the loan amount, including loan fees, title insurance, appraisal, and recording fees. For a $600,000 loan, expect $12,000-$30,000 in costs. No-cost refinances are available but with higher rates.

California refinances typically take 30-45 days from application to closing. Rate locks usually last 30-60 days. Cash-out refinances may take longer due to additional documentation requirements. Streamline refinances (VA IRRRL, FHA Streamline) can close faster.

Yes, California allows cash-out refinances up to 80% loan-to-value for conventional loans, 90% for VA loans, and 85% for FHA loans. You can use the cash for home improvements, debt consolidation, or other purposes. Cash-out rates are typically 0.125-0.25% higher.

If you have an ARM that's about to adjust upward, refinancing to a fixed rate can provide payment stability. Compare your current ARM rate and upcoming adjustments to current fixed rates. California's volatile rate environment often makes fixed rates attractive for long-term stability.