Danville Mortgage FAQs: Your Complete Guide to Home Financing in Contra Costa County

Most lenders require two years of tax returns, recent pay stubs, bank statements, and photo ID. Self-employed borrowers may need additional profit and loss statements or business bank statements.

The typical timeline runs 30-45 days from application to closing. Pre-approval takes 1-3 days, while underwriting usually requires 2-3 weeks depending on loan complexity and documentation completeness.

Minimum scores vary by loan type. FHA loans accept scores as low as 580, conventional loans typically require 620 or higher, and jumbo loans often need 700 plus. Rates vary by borrower profile and market conditions.

Down payment requirements range from 0% for VA and USDA loans to 3% for conventional and FHA loans. Jumbo loans and investment properties typically require 10-25% down depending on the property type.

Closing costs typically run 2-5% of the loan amount and include lender fees, title insurance, escrow fees, and prepaid items. On a $800,000 Danville home, expect $16,000-$40,000 in total closing costs.

Yes, self-employed buyers have multiple options including bank statement loans, profit and loss statement loans, and 1099 loans. These programs evaluate income differently than traditional W-2 verification methods.

FHA loans require lower credit scores and smaller down payments but include mortgage insurance for the loan's life. Conventional loans offer more flexibility and allow PMI removal once you reach 20% equity.

PMI is required on conventional loans with less than 20% down and on all FHA loans. You can avoid it by putting 20% down, using a piggyback loan, or choosing a lender-paid option with a higher rate.

Jumbo loans exceed conforming loan limits set by Fannie Mae and Freddie Mac. In Contra Costa County, loans above $806,500 typically require jumbo financing with stricter qualification requirements.

DSCR loans qualify borrowers based on the property's rental income rather than personal income. The property must generate enough rent to cover the mortgage payment, typically requiring a 1.0 or higher debt service coverage ratio.

Pre-qualification is an estimate based on self-reported information. Pre-approval involves verified documentation and credit checks, giving you a stronger negotiating position with sellers in competitive markets.

Yes, most loan programs allow gift funds from immediate family members. You'll need a gift letter stating the funds don't require repayment and documentation showing the transfer of funds.

ARMs offer lower initial rates that adjust after a fixed period. They work well if you plan to move or refinance within 5-7 years or expect income increases to handle potential payment adjustments.

Interest-only loans let you pay only interest for a set period, typically 5-10 years. They reduce initial payments but require higher payments later when principal payments begin and don't build equity during the interest-only period.

Bank statement loans use 12-24 months of personal or business bank deposits to calculate income instead of tax returns. They help self-employed borrowers who write off significant business expenses.

Yes, ITIN loans allow borrowers without Social Security numbers to purchase homes in Danville. These programs require valid work authorization and follow similar qualification standards as traditional mortgages.

Discount points are prepaid interest that lowers your rate, with each point costing 1% of the loan amount. They make sense if you plan to keep the loan long enough to recover the upfront cost through monthly savings.

Bridge loans provide short-term financing using your current home's equity for a new purchase down payment. They typically last 6-12 months and help you buy without a home sale contingency.

Asset depletion loans qualify borrowers based on liquid assets rather than income. Lenders divide your assets by the loan term to calculate monthly qualifying income, ideal for retirees or those with substantial savings.

Yes, cash-out refinancing lets you borrow against your home equity. Most lenders allow you to keep 20% equity in the home while accessing the rest for renovations, debt consolidation, or other purposes.

A HELOC provides revolving credit secured by your home equity with a variable interest rate. You draw funds as needed during the draw period and make interest-only or principal-plus-interest payments.

VA loans offer 0% down payment options with no mortgage insurance for eligible veterans and service members. They provide competitive rates and more flexible qualification standards than conventional financing.

Foreign national loans help non-US citizens purchase Danville properties without US credit history or residency. These programs typically require larger down payments and use international income documentation.

Hard money loans provide fast funding for fix-and-flip projects or properties that don't qualify for traditional financing. They feature higher rates and shorter terms but approve based on property value rather than borrower qualifications.

LTV compares your loan amount to the property's value. An $800,000 home with a $640,000 loan has an 80% LTV. Lower LTVs typically qualify for better rates and terms.

DTI divides monthly debt payments by gross income. Most conventional loans require DTI under 43-50%, though some programs allow higher ratios with strong credit and reserves.

Yes, waiting periods vary by loan type. FHA loans may be available 2-3 years after bankruptcy or foreclosure, while conventional loans typically require 4-7 years with credit rebuilding.

Construction loans provide funds in stages as your home is built. They convert to permanent mortgages after completion and require detailed building plans, contractor information, and larger down payments.

Rate locks guarantee your rate for 30-60 days during the loan process. Lock when you have a purchase contract or are ready to close on a refinance to protect against rate increases.

An independent appraiser evaluates your property's value by comparing it to recent sales of similar Danville homes. The appraisal protects both you and the lender by ensuring the property's worth supports the loan amount.

Some FHA and VA loans are assumable, allowing you to take over the seller's loan terms. This can save money if their rate is lower than current rates, though you must qualify through the lender.

Title insurance protects against ownership disputes, liens, or errors in public records. Lenders require it to protect their investment, and owner's policies protect your ownership rights.

Most loans allow refinancing immediately, though cash-out refinances may require 6-12 months of ownership. Consider closing costs and break-even timelines before refinancing to ensure financial benefit.

Contact your lender immediately to discuss options like loan modification, forbearance, or repayment plans. Early communication often leads to better solutions than waiting until you miss payments.