Do you have questions about the mortgage qualification process in California, or what it takes to qualify for a home loan in 2017? You’ve come to the right place. On this page, you’ll find answers to some of the most frequently asked questions relating to California mortgage qualification trends in 2017.
What are the basic California mortgage qualification guidelines in 2017?
“Am I qualified for a California mortgage loan in 2017?”
This is one of the most common questions among home buyers and mortgage shoppers in California. It’s also a very specific and individualized question, so it’s hard to answer in a blog post. With that said, we can offer some generalized mortgage qualification standards for California borrowers.
Current mortgage regulations and standards put a lot of emphasis on the borrower’s ability to repay — and rightfully so. A prudent lender will review your recurring monthly debts in relation to your income, to ensure you’ll be able to afford your monthly mortgage payments (on top of your existing debt obligations).
But again, this is a very generalized “recipe” for qualification. If you’d like, we can review your financial situation to see if you’re a good candidate for a home loan in 2017. Just call or send us an email, and we’ll go from there.
What credit score do I need to get a home loan?
Credit scores are an important part of the mortgage qualification and approval process in California. These three-digit numbers give lenders some insight into how you have borrowed and repaid money in the past, as that’s primarily what drives your credit score.
Generally speaking, a higher score will increase your chances of qualifying for a mortgage loan in California. A low score could potentially hurt your chances of being approved for financing.
There is no single cutoff point used across the mortgage industry. Individual lenders have their own individual standards. With that being said, a score of 600 or higher will put you in a good position to qualify for a loan. A score of 700 or higher will put you in an even better position, and could help you qualify for a lower interest rate. If you’re in the “800-and-up” club, you should have no trouble qualifying for a mortgage loan in California.
But bear in mind these are just general guidelines. So don’t be discouraged if you have a relatively low score. If you’re a good candidate in all other areas, a low credit score by itself might not necessarily be an issue.
Contact us with any questions you have about California mortgage qualification and credit scores.
How much income do I need to qualify for a mortgage in California?
For obvious reasons, mortgage lenders want to ensure that you can afford to repay your home loan, on top of your other monthly expenses like car payments and credit cards. Your income must be sufficient to cover all of your recurring debts.
This brings us to the debt-to-income ratio, or DTI. Debt ratios usually play a role during the mortgage qualification process in California. So, as a borrower, you should have at least a basic understanding of what they are and how they affect you.
As the name suggests, the debt-to-income (DTI) ratio compares a borrower’s debts and income. Example: A person who grosses $4,000 per month, and spends $1,500 on total monthly debts, would have a DTI ratio of 37.5% (because 1500 / 4000 = .375, or 37.5%).
There is no single cutoff point for debt ratios. As with credit scores, these standards can vary from one lender to the next. With that being said, a total or “back-end” DTI ratio in the mid 40% range or lower will put you in a pretty good position to qualify for a California mortgage loan.
But again, this number is not set in stone. Exceptions can be made for borrowers with strong credit histories, significant cash reserves in the bank, etc. Mortgage lending is a very individualized process. Every financing scenario is different, because every borrower is different. It’s not a one-size-fits-all situation.
What kind of documents do I need?
Documents are the lifeblood of the mortgage industry. So you’ll have to provide quite a few of them in order to qualify for a home loan in California. Fortunately, most of these documents are straightforward and easily obtained.
When applying for a mortgage loan in the state of California, you can expect to be asked for the following documents:
- Recent paycheck stubs
- Bank statements for checking and savings accounts
- W-2 forms and tax returns for the last two years
- Documents relating to other assets and investments
- Profit-and-loss statements for self-employed borrowers
What’s the next step? How do I get started?
Do you need a mortgage loan to buy or refinance a home in California? If so, you can start the qualification process by just giving us a call or sending an email. We will review your situation to determine if you’re qualified for a mortgage loan. We can also help you choose the best type of financing for your particular situation.
Bridgepoint Funding has been helping borrowers in the Golden State for more than 16 years. We offer a variety of loan products and programs, some with very flexible qualification criteria.
Contact us today get get started. We look forward to hearing from you!