Merced Mortgage FAQs: Your Questions Answered by Local Loan Experts

FHA loans allow 580 minimum credit scores. Conventional loans typically require 620, though higher scores unlock better rates and terms.

FHA requires 3.5% down. Conventional loans start at 3% for first-time buyers, 5% for repeat buyers.

USDA loans offer zero-down financing for eligible rural areas in Merced County. Properties must meet specific location and income requirements.

Bank statement loans use 12-24 months of deposits instead of tax returns. These work well for Merced's ag contractors, truckers, and small business owners.

FHA allows lower credit and down payment but requires mortgage insurance for the loan's life. Conventional drops PMI at 20% equity.

Expect 30-45 days for purchase loans. Refinances close faster at 25-35 days depending on appraisal turnaround.

Standard loans require two years tax returns, 60 days paystubs, bank statements, and ID. Alternative programs like 1099 loans have different requirements.

Yes. 1099 loans verify income directly from your 1099 forms without requiring full tax returns, ideal for independent contractors.

Expect 2-5% of purchase price. This covers appraisal, title insurance, escrow fees, lender charges, and prepaid property taxes.

Merced offers lower entry prices than coastal California. FHA and conventional 3% down loans make ownership accessible for qualified buyers.

ITIN loans are available for non-citizen borrowers. Requirements include work history, down payment, and credit profile established in the US.

DSCR loans qualify based on rental income, not personal income. Investors buying Merced rentals use these to avoid W-2 documentation.

30-year loans offer lower monthly payments. 15-year loans build equity faster and save interest but require higher income qualification.

Private mortgage insurance costs 0.3-1.5% annually on conventional loans under 20% down. Avoid it with 20% down or piggyback loans.

Yes. Investor loans require 15-25% down depending on property type. DSCR programs skip tax returns if rent covers the mortgage.

ARMs offer lower initial rates that adjust after a fixed period. They work for buyers planning to move or refinance within 5-7 years.

Veterans get zero-down VA loans with no PMI. These are often the best deal for eligible service members buying in Merced.

Bridge loans provide short-term financing to buy before selling your current home. They're expensive but solve timing problems between transactions.

Most loan programs allow gifted down payments from family. Lenders require a signed gift letter stating funds don't need repayment.

No set minimum exists. Lenders calculate debt-to-income ratios, typically capping total debts at 43-50% of gross monthly income.

Lenders analyze 12-24 months of business or personal bank deposits. They apply a percentage to calculate qualifying income without tax returns.

Hard money loans fund quickly based on property value, not credit. Investors use these for fix-and-flip projects or time-sensitive purchases.

Paying points upfront reduces your rate permanently. This makes sense if you'll keep the loan long enough to recover the cost.

Jumbo loans finance amounts above conforming limits. Merced rarely needs these, but they're available for high-value properties or multi-unit deals.

These loans qualify you using savings or investment accounts instead of income. Lenders divide assets by 360 months to calculate qualifying income.

Divorce decrees and separation agreements impact debt obligations. Lenders review these documents to determine which debts belong to you.

Construction loans fund new builds in phases as work completes. They convert to permanent mortgages once the home is finished and appraised.

Yes, if you qualify for the full loan amount solo. The property must appraise high enough and your income must support the payment.

Home equity lines of credit let you borrow against equity as needed. Use them for renovations, consolidation, or emergency funds at lower rates.

You can pay the difference in cash, renegotiate the price, or cancel the deal. Low appraisals limit how much lenders will fund.

Investment properties and some loan types require 2-6 months reserves. This proves you can handle payments if income drops temporarily.

Recent bankruptcy, foreclosure, or late mortgage payments create waiting periods. Most other credit issues can work with the right loan program.

You pay only interest for an initial period, then principal and interest later. Monthly payments jump significantly when the interest-only period ends.

Foreign national loans allow non-US residents to purchase. These require larger down payments and have stricter documentation requirements.

Self-employed borrowers provide P&L statements prepared by a CPA instead of full tax returns. These verify business income for qualification.

Lock rates when you're satisfied with the number and can close within the lock period. Floating risks rate increases but might capture decreases.