Home buyers with variable income often wonder if they can qualify for a mortgage loan…
Q&A: How Do I Qualify for a Mortgage Loan in California?
For many first-time homebuyers in California, the mortgage qualification and approval process is one big mystery. Borrowers tend to have a lot of questions about this process.
What does it take to qualify for a mortgage loan in California? What kind of qualifications does a borrower need to get approved for a loan? How does the whole process work?
We’ve covered other aspects of the home loan process in previous articles. Today, we will zero in on one of the common questions above: “How do I qualify for a mortgage loan in California?”
What Does ‘Mortgage Qualification’ Mean, Exactly?
Mortgage qualification is a general term that refers to the home loan application, underwriting and approval process. In short, mortgage qualification occurs when you are reviewed for a home loan and ultimately approved by the lender. You “qualify” for financing, hence the term.
There are many components and steps to the mortgage qualification process in California. In order to qualify for a home loan, borrowers needed to have:
- A decent credit score
- A manageable level of debt
- Steady and sufficient income to repay the loan
- A variety of financial documents
These are typically the minimum requirements that allow a person to qualify for mortgage loan in California. But depending on the financing method you use, you might encounter other qualification requirements as well.
If you have a credit score of 600 or higher, a manageable level of debt, and enough income to keep up with your monthly payments, you could be a good candidate for a home loan.
So those are the basic requirements. Let’s move on to talk about the process that takes place when a person gets “qualified” for a mortgage loan in California.
Qualifying for a Home Loan In California
Note: The steps below apply to borrowers all across the U.S. We are focusing on California in this article because that’s the state where we do business. Bridgepoint Funding is located in the Bay Area and serves the entire state of California. So we have a lot of in-house knowledge of this particular subject.
Here are the basic steps involved when a person qualifies for a mortgage loan in California:
1. Speak to mortgage lender about your financing needs.
It’s always a good idea to talk to a knowledgeable mortgage broker or loan officer about your financing needs. What kind of home loan do you need for your particular situation? How much do you need to borrow? What are your long-term priorities, from a financing perspective? These are important questions from a borrower’s standpoint. So you’ll want to resolve them before committing to a particular mortgage product or program.
2. Submit a loan application.
You can’t qualify for a mortgage loan in California until you submit a loan application. This document gets the ball rolling, so to speak. The good news is it’s fairly straightforward.
In California, borrowers seeking a home loan typically use the Uniform Residential Loan Application (URLA). This is the standard mortgage application document used by lenders all across the country.
We’ve covered the home loan application process in a previous blog post. So be sure to review that article if you would like to learn more about the application aspect of mortgage qualification in California. You can also find a sample application document online, just by googling “uniform residential loan application” or “Fannie Mae form 1003.”
3. Provide additional documents as requested by your lender.
To qualify for a mortgage loan in California, borrowers must provide a variety of documents relating to their financial situation. The “usual suspects” include bank statements, tax returns, pay stubs, W-2 forms, and other financial-related documents.
4. Wait for the home appraisal and underwriting process.
Before you can be officially qualified and approved for a mortgage loan, you’ll have to get through the home appraisal and underwriting process. The good news here is that there’s not much for you to do, as a borrower.
The lender will request a home appraisal to determine the current market value of the home. The underwriter will then review the entire loan file to make sure it meets all applicable requirements.
There’s a chance you might receive some additional requests from the underwriter, such as a letter of explanation for a particular financial matter. But aside from that, there is not much for the home buyer to do during this stage, other than stay in touch and follow up.
Ready to Get Started?
Do you have questions about the mortgage qualification process in California? Ready to start the application process? We can help.
Bridgepoint Funding serves home buyers and homeowners all across the Golden State. We offer a broad range of mortgage financing options, some of which have flexible qualification requirements.
Please contact us with any mortgage-related questions you have, or to find out how much you might be able to borrow. We look forward to hearing from you!
