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Sierra Madre Mortgage FAQ
Sierra Madre sits at the base of the San Gabriels with a small-town feel and historic charm. The housing stock skews older and prices reflect the mature tree-lined streets and tight-knit community.
We've fielded hundreds of mortgage questions from Sierra Madre buyers. Most wonder about jumbo loan thresholds, renovation financing for older homes, and how self-employment affects approval.
Below are answers to the questions we hear most often. Every borrower profile is different, so use this as a starting point before we dig into your specific situation.
Most conventional loans require 620 minimum. FHA accepts 580 with 3.5% down, though many lenders set their own floor at 620.
FHA allows 3.5%, conventional starts at 3%, and jumbo typically requires 10-20%. Down payment affects your rate and whether you pay PMI.
Anything above $806,500 in 2025 for Los Angeles County. Sierra Madre homes frequently hit this threshold given the market.
Yes, if they meet appraisal and safety standards. Homes needing major repairs may require renovation loans like 203k or Homestyle.
Absolutely, though most homes here exceed FHA loan limits. You'd need jumbo financing for properties above $806,500.
Traditional lenders want two years of tax returns. Bank statement loans use 12-24 months of deposits instead, better for write-off-heavy borrowers.
Standard loans close in 25-35 days. Complex income scenarios or appraisal delays can push that to 45 days.
Expect 2-5% of the purchase price. This includes lender fees, title insurance, escrow, and county recording charges.
Only if you plan to keep the loan beyond the break-even period, usually 4-6 years. Most refinance or move sooner.
Pre-qual is an estimate based on what you tell us. Pre-approval means we verified income, assets, and credit through underwriting.
No. Investment properties require 15-25% down on conventional loans. DSCR loans offer alternatives for rental income verification.
Most refinances require one. Some programs offer appraisal waivers if you have strong equity and meet automated underwriting criteria.
Private mortgage insurance protects the lender when you put down less than 20%. You avoid it with 20% down or piggyback loans.
Yes on conventional and FHA loans. The donor writes a gift letter stating no repayment is expected.
Debt Service Coverage Ratio loans qualify you based on rental income, not personal income. Investors with multiple properties use them.
ARMs offer lower initial rates that adjust after a fixed period. A 7/1 ARM is fixed for seven years, then adjusts annually.
Yes. Foreign national loans require larger down payments, typically 30-40%, and don't rely on US credit history.
Conventional loans max out around 50% DTI. FHA can stretch to 56% with strong credit and compensating factors.
Lock if you're happy with the rate and closing soon. Float if you have time and think rates will drop.
You negotiate a lower price, bring more cash to close, or cancel the deal. Lenders base loan amounts on appraised value.
Only if it's habitable and meets safety standards. Major renovations require FHA 203k or Conventional Homestyle loans.
Lenders use 12-24 months of business or personal bank statements to calculate income. Self-employed borrowers with tax write-offs benefit most.
Rule of thumb: your monthly payment shouldn't exceed 28-30% of gross income. Exact numbers depend on debts, down payment, and rates.
Absolutely. VA loans require no down payment and no PMI, making them the best deal for qualifying service members.
Jumbo rates run 0.25-0.75% higher than conforming loans. Rates vary by borrower profile and market conditions.
Jumbo loans typically require 6-12 months of mortgage payments in reserves. Conventional loans may not require any for primary residences.
Brokers shop rates across 200+ lenders instead of offering one bank's products. You get more loan options and competitive pricing.
Not on a purchase. Refinances sometimes allow it if you have enough equity and the loan amount stays within limits.
Bridge loans let you buy before selling your current home. They're short-term with higher rates and require equity in your existing property.
Recent pay stubs, two years of W-2s or tax returns, bank statements, and photo ID. Self-employed borrowers need additional documentation.
Yes through ITIN loan programs. You'll need work history, tax returns filed with your ITIN, and a larger down payment.
FHA allows lower credit scores and smaller down payments but requires mortgage insurance for the loan's life. Conventional has stricter credit requirements and PMI drops off at 80% LTV.
Talk to a broker who sees your full financial picture. The right loan depends on income type, credit, down payment, and property use.
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.