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Avalon Mortgage FAQ
Buying on Catalina Island isn't like buying in mainland LA. Lenders treat Avalon properties differently because of limited inventory, seasonal tourism, and boat access.
We've financed island homes across every price range. These FAQs cover what actually matters when you're borrowing for Avalon real estate.
From jumbo loans on oceanfront estates to DSCR loans for vacation rentals, we'll explain how each program works in this unique market.
Limited inventory and boat-only access create unique appraisal challenges. Many lenders restrict island property lending or require larger down payments.
Conventional loans start at 5% down for primary residences. Second homes and investment properties typically need 15-25% down depending on the lender.
Yes, if it's your primary residence and the property meets FHA standards. You'll need 3.5% down and a 580+ credit score.
DSCR loans work best for short-term rentals. They approve based on the property's rental income, not your W-2 earnings.
Conventional loans require 620 minimum. FHA accepts 580, while jumbo loans typically need 680-700 depending on down payment size.
Very common. Most waterfront properties exceed conforming loan limits, requiring jumbo financing with stricter qualification standards.
Expect 2-4 weeks. Appraisers need boat transport time and fewer island comps make valuation more complex than mainland properties.
Yes. DSCR loans approve based on rental income potential, not your personal income or tax returns.
Two years tax returns, 60 days bank statements, W-2s or 1099s, and proof of island property insurance. Lenders scrutinize reserves closely.
Most coastal properties require it. Lenders mandate flood insurance if your property sits in a FEMA-designated flood zone.
Plan for 2-5% of purchase price. Island properties sometimes incur higher appraisal and title fees due to access challenges.
Absolutely. Bank statement loans use 12-24 months of deposits instead of tax returns to calculate income.
DSCR loans qualify you based on property cash flow, not personal income. Perfect for investors with multiple rentals or complex tax situations.
Yes, especially for jumbo buyers. You pay only interest for 5-10 years, then the loan converts to principal and interest payments.
Conventional loans discount seasonal income heavily. DSCR loans use actual rental performance, making them better for short-term rental properties.
Yes, if it's your primary residence. VA loans offer zero down payment and don't require PMI, even on the island.
Pre-qualification is an estimate. Pre-approval means we've verified your income, credit, and assets with documentation.
Lenders cap your total housing payment at 28-43% of gross monthly income. Island properties sometimes have higher insurance and HOA costs.
Only if you put down less than 20% on a conventional loan. FHA charges upfront and annual mortgage insurance regardless of down payment.
Yes. Foreign national loans require 30-40% down and don't need US credit history or Social Security numbers.
Points are prepaid interest. Each point costs 1% of the loan amount and lowers your rate by roughly 0.25%. Worth it if you're keeping the loan 5+ years.
Lenders scrutinize rental income carefully. They want proof your property can cash flow during off-season months, not just summer peaks.
Not on purchases. You can roll costs into refinances, but purchase loans require you to bring closing costs to the table.
ARMs offer lower initial rates that adjust after 5-7 years. Smart choice if you plan to sell or refinance before the adjustment period.
Lenders include HOA dues in your debt-to-income ratio. High Avalon HOA fees can reduce your maximum loan amount significantly.
Yes. ITIN loans serve taxpayers without Social Security numbers, requiring similar documentation to conventional loans.
Bridge loans let you buy before selling your current home. They work well when you need to close fast on limited island inventory.
Most lenders require 6-12 months of mortgage payments in reserve. Island properties sometimes need higher reserves due to seasonal income concerns.
Condos need different approval than single-family homes. Lenders review HOA budgets and require warrantability for condo financing.
Consult your tax advisor. Generally yes, but tax treatment differs between second homes and rental properties you use personally.
Lenders calculate income by dividing your assets by loan term. Works for retirees or high-net-worth buyers without traditional income.
Typically 30-45 days for purchase loans. Island appraisal logistics add time compared to 21-day mainland closings.
15-year loans save on interest but require higher monthly payments. Choose based on cash flow needs and long-term ownership plans.
You can negotiate price down, bring more cash, or cancel the deal. Low appraisals are common when island comps are scarce.
Yes, through renovation loans or construction financing. Hard money loans work for investors doing quick flips with major repairs.
We shop your scenario across 200+ lenders. Your employment type, down payment, and property use determine the best program.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.