Question 1

Does King City qualify for USDA loans?

Accepted Answer

Yes. Much of King City falls within USDA-eligible rural zones. USDA loans require zero down payment and are one of the best programs available here.

Question 2

What is the minimum credit score for an FHA loan?

Accepted Answer

Most FHA lenders want a 580 score for 3.5% down. Drop below 580 and you'll need 10% down — if a lender will approve you at all.

Question 3

How much do I need for a down payment in King City?

Accepted Answer

It depends on the loan. USDA and VA require zero down. FHA needs 3.5%. Conventional starts at 3% for qualified buyers.

Question 4

What credit score do I need for a conventional loan?

Accepted Answer

Conventional loans require at least a 620 score. Better scores get better rates — 740+ puts you in the top pricing tier.

Question 5

What documents do I need to get a mortgage?

Accepted Answer

Expect to provide two years of tax returns, W-2s, 60 days of bank statements, and pay stubs. Self-employed borrowers need more documentation.

Question 6

How long does mortgage approval take?

Accepted Answer

A standard purchase loan closes in 21 to 30 days. Some programs like USDA take longer — budget 30 to 45 days for those.

Question 7

What is a DSCR loan and who uses it in King City?

Accepted Answer

DSCR stands for Debt Service Coverage Ratio. Investors use it to qualify based on rental income, not personal income. No tax returns needed.

Question 8

Can I get a mortgage with an ITIN instead of a Social Security number?

Accepted Answer

Yes. ITIN loans are available for borrowers without Social Security numbers. Expect a larger down payment and higher rates than standard programs.

Question 9

What is a bank statement loan?

Accepted Answer

Bank statement loans use 12 to 24 months of deposits to prove income — no tax returns required. They're built for self-employed borrowers.

Question 10

Are VA loans available to King City buyers?

Accepted Answer

Absolutely. Eligible veterans can buy with zero down and no PMI. VA loans consistently offer some of the lowest rates available.

Question 11

What are closing costs in Monterey County?

Accepted Answer

Closing costs typically run 2% to 5% of the loan amount. Title, escrow, lender fees, and prepaid taxes are the biggest line items.

Question 12

What is PMI and when do I need it?

Accepted Answer

PMI is private mortgage insurance. Conventional loans require it when your down payment is under 20%. It drops off once you reach 20% equity.

Question 13

Do FHA loans have mortgage insurance?

Accepted Answer

Yes, always. FHA charges an upfront premium of 1.75% plus an annual premium. It stays for the life of the loan if you put less than 10% down.

Question 14

What is a jumbo loan and do I need one in King City?

Accepted Answer

Jumbo loans exceed the conforming loan limit — $806,500 in Monterey County as of 2026. Most King City purchases fall under that limit.

Question 15

What is a conforming loan?

Accepted Answer

A conforming loan meets Fannie Mae and Freddie Mac guidelines. It has loan limits, credit standards, and typically offers competitive rates.

Question 16

What is an ARM loan and should I consider one?

Accepted Answer

An ARM — adjustable rate mortgage — starts with a fixed rate then adjusts periodically. It can make sense if you plan to sell or refi within 5 to 7 years.

Question 17

What is a bridge loan?

Accepted Answer

A bridge loan lets you tap your current home's equity to buy a new one before selling. It's short-term financing — usually 6 to 12 months.

Question 18

Can I use a 1099 to qualify for a mortgage?

Accepted Answer

Yes. 1099 loans use your contractor income directly. You'll typically need 12 to 24 months of 1099s and bank statements to verify earnings.

Question 19

What is an asset depletion loan?

Accepted Answer

Lenders calculate a monthly income figure from your liquid assets. It's designed for retirees or high-net-worth borrowers with strong savings but low income.

Question 20

What is a hard money loan?

Accepted Answer

Hard money loans are asset-based, short-term loans from private lenders. They close fast but carry high rates — mainly used by fix-and-flip investors.

Question 21

Can I get a construction loan for a new build in King City?

Accepted Answer

Yes. Construction loans fund the build phase, then convert to a permanent mortgage at completion. Expect tighter credit and reserve requirements.

Question 22

What is a reverse mortgage and who qualifies?

Accepted Answer

Reverse mortgages let homeowners 62 and older tap home equity without monthly payments. The loan is repaid when the home is sold or the borrower moves out.

Question 23

What is a HELOC?

Accepted Answer

A HELOC — home equity line of credit — lets you borrow against your equity as needed. It works like a credit card secured by your home.

Question 24

What is a home equity loan?

Accepted Answer

A home equity loan gives you a lump sum at a fixed rate. You repay it in fixed monthly payments — unlike a HELOC, the amount doesn't revolve.

Question 25

What is a portfolio ARM?

Accepted Answer

Portfolio ARMs are held by the lender — not sold to Fannie or Freddie. That means more flexible terms, but lenders set their own qualification rules.

Question 26

What is a profit and loss statement loan?

Accepted Answer

P&L loans use a CPA-prepared profit and loss statement to verify self-employed income. No tax returns needed — great for business owners who write off aggressively.

Question 27

What is a foreign national loan?

Accepted Answer

Foreign national loans are for non-US citizens who don't have a green card or visa qualifying them for standard programs. Expect 25% to 30% down.

Question 28

What is a community mortgage?

Accepted Answer

Community mortgage programs target low-to-moderate income buyers. They often combine lower rates with down payment assistance or reduced PMI.

Question 29

What is an interest-only loan?

Accepted Answer

You pay only interest for a set period — often 5 to 10 years — then principal kicks in. Monthly payments start lower but increase later.

Question 30

How does being self-employed affect my mortgage options?

Accepted Answer

Lenders average your last two years of net income from tax returns. If write-offs cut that number low, bank statement or P&L loans are often better fits.

Question 31

What is debt-to-income ratio and what's the max?

Accepted Answer

DTI is your monthly debt payments divided by gross income. Most conventional loans cap at 45%. FHA and some non-QM programs allow up to 55%.

Question 32

How does an interest rate compare to APR?

Accepted Answer

The rate is your base borrowing cost. APR includes fees and gives a fuller picture of the loan's total cost. Always compare APRs across lenders.

Question 33

What are mortgage points and do they make sense?

Accepted Answer

One point costs 1% of the loan and buys down your rate. It makes sense if you plan to keep the loan long enough to recoup the upfront cost.

Question 34

Should I get pre-approved before looking at homes in King City?

Accepted Answer

Yes — sellers won't take you seriously without it. Pre-approval tells you your real price range and speeds up closing once you're under contract.

Question 35

How do lenders verify employment?

Accepted Answer

Lenders call your employer directly and pull a verification of employment form. Some lenders re-verify the day before closing.

Question 36

What happens if my appraisal comes in low?

Accepted Answer

The lender bases the loan on the appraised value, not the purchase price. You'll need to renegotiate, bring cash to cover the gap, or walk away.

Question 37

Can I buy investment property in King City?

Accepted Answer

Yes. Conventional investor loans require 15% to 25% down. DSCR loans qualify on the property's rent income — no personal income docs needed.

Question 38

What is an equity appreciation loan?

Accepted Answer

These programs share in your home's future appreciation in exchange for upfront cash or a lower rate. Terms vary widely — read the fine print carefully.

Question 39

How do I choose between FHA and conventional?

Accepted Answer

FHA wins when your credit is under 680 or your down payment is low. Conventional is usually cheaper overall once your score hits 700 or higher.

Question 40

What makes SRK CAPITAL different from a bank?

Accepted Answer

We're a broker with access to 200+ wholesale lenders. Banks offer their own products only — we shop across lenders to find the best rate and program for you.

King City, CA Mortgage FAQs — Real Answers From a Broker