Norwalk Mortgage FAQs: Get Answers from Local LA County Brokers

FHA loans require 580 minimum for 3.5% down, 500 with 10% down. Conventional loans need 620, though 680+ gets better rates and terms in LA County's competitive market.

FHA allows 3.5% down, conventional goes as low as 3%, VA and USDA offer zero down. On a $650,000 Norwalk home, that's $22,750 to $65,000 depending on loan type.

W-2 buyers need two years tax returns, two months bank statements, recent pay stubs, and employment verification. Self-employed borrowers add business bank statements and profit/loss statements.

Pre-approval takes 1-3 days. Full approval averages 21-30 days for conventional, 30-45 for FHA/VA due to additional appraisal requirements and government processing.

Get pre-approved before shopping in Norwalk. Pre-qualification is a guess, pre-approval verifies income and credit, making your offer competitive against cash and other financed buyers.

FHA requires lower credit (580 vs 620) and down payment (3.5% vs 3-5%) but charges permanent mortgage insurance. Conventional drops PMI at 20% equity and offers better rates above 700 credit.

Yes, FHA accepts 580 credit scores. Below that, hard money or portfolio loans work but carry higher rates and require 20-30% down payment minimums.

Active duty, veterans, and eligible spouses qualify with 580+ credit and no down payment. VA loans don't charge PMI and cap closing costs in California.

Expect 2-5% of purchase price: $13,000-$32,500 on a $650,000 home. This covers lender fees, title insurance, escrow, and property taxes, with some variation by loan type.

Yes, sellers can contribute up to 3% on conventional, 6% on FHA/VA loans. In competitive markets, requesting seller credits weakens your offer against clean bids.

Private mortgage insurance protects lenders when you put down less than 20%. Avoid it with 20% down, VA loans, or piggyback second mortgages splitting the difference.

Lenders allow debt-to-income ratios up to 43-50% depending on loan type. At $100,000 income with $500 monthly debt, you'd qualify for roughly $550,000-$625,000.

Self-employed borrowers use 12-24 months personal or business bank statements instead of tax returns. This works when write-offs reduce taxable income below actual cash flow.

Yes, 1099 loans verify income through Form 1099s instead of W-2s or tax returns. They work for gig workers, independent contractors, and anyone with fluctuating 1099 income.

Debt Service Coverage Ratio loans qualify based on rental income, not personal income. You need the property's rent to cover 1.0-1.25x the mortgage payment.

No, green card holders qualify for conventional/FHA/VA loans. Foreign nationals use specialized programs with 20-40% down, and ITIN loans serve borrowers without Social Security numbers.

ARMs offer lower initial rates than fixed mortgages, typically 0.5-1.5% less for the first 5-10 years. They make sense if you'll sell or refinance before adjustment.

Each point costs 1% of loan amount and drops rate roughly 0.25%. Break-even is typically 4-7 years, so only pay points if keeping the loan long-term.

Yes, lenders count 1% of the balance or actual payment in debt ratios. $50,000 in student loans adds $500/month to debt calculations, reducing buying power roughly $100,000.

Jumbo loans exceed conforming limits of $806,500 in LA County for 2024. They require stronger credit (700+), larger down payments (10-20%), and carry slightly higher rates.

Lock your rate for 30-60 days once in contract. If rates drop during that window, float-down options let you capture lower rates for a fee.

Rates vary by borrower profile and market conditions. As of recent data, conventional rates range 6.5-7.5%, FHA runs 6.25-7.25%, with variance based on credit and down payment.

FHA 203(k) and conventional renovation loans finance purchase plus repairs in one mortgage. Hard money works for major rehabs, though rates run 9-12% for 6-24 month terms.

Bridge loans tap existing home equity to buy before selling. They work for non-contingent offers but cost 7-10% interest for 6-12 months until your current home sells.

Refinancing resets your loan with new terms. It makes sense when rates drop 0.75%+ or you need cash-out for renovations, with break-even typically 2-3 years on closing costs.

Home equity lines of credit let you borrow against equity as needed. Rates run 2-3% above prime with 10-year draw periods and 20-year repayment terms in California.

Yes, investor loans allow 5-10 financed properties with 15-25% down per property. DSCR loans focus on rental income rather than personal income for easier qualification.

Address denial reasons first: pay down debt, dispute credit errors, increase down payment, or wait 6-12 months. Alternative programs like bank statement loans offer secondary paths.

Yes, co-borrowers add income and share the debt, often increasing buying power 40-60%. Both incomes and credit scores count, and both go on title and the loan.

FHA allows loans 2 years after Chapter 7, 1 year into Chapter 13 with payment history. Conventional requires 4 years post-discharge for standard programs with standard rates.

We shop 200+ lenders to find the best rate and program fit for your situation. Banks show you one option, we compare dozens to save you money and increase approval odds.

CalHFA offers down payment assistance and reduced rates for first-time buyers meeting income limits. Conventional loans also provide 3% down options without first-time buyer requirements.

Interest-only loans defer principal for 5-10 years, lowering initial payments 20-30%. They work for high earners expecting income growth or investors maximizing cash flow on rentals.

Yes, immediate family can gift funds for down payment and closing costs. You need a gift letter stating no repayment required and paper trail showing fund transfer.

Pre-approval verifies income and credit initially. Clear to close comes after full underwriting, appraisal, and title review, meaning you're approved to fund and sign final documents.

Lenders don't require it, but California Earthquake Authority offers coverage starting around $800-$2,000 annually. It's separate from homeowners insurance and covers structural damage from seismic events.

Expect roughly 1.25% of purchase price annually in Norwalk, paid through escrow monthly. On a $650,000 home, that's about $8,125 per year or $677 per month added to your payment.

Portfolio ARMs are non-conforming adjustable loans held by individual lenders. They offer flexibility for unique income situations or properties that don't fit standard conforming guidelines.

Yes, construction loans fund new builds or major renovations in phases as work completes. They convert to permanent mortgages once construction finishes, requiring 20-25% down typically.

Asset depletion loans qualify you based on bank/investment account balances rather than employment income. Lenders divide total assets by 360 months to calculate qualifying income for retirees or trust-fund buyers.