Rancho Cordova Mortgage FAQs: Your Home Financing Questions Answered

FHA loans require a minimum 580 credit score with 3.5% down, or 500 with 10% down. Conventional loans typically need 620 or higher. Some alternative programs accept lower scores depending on compensating factors.

Down payment requirements vary by loan type. FHA loans require as little as 3.5%, conventional loans can start at 3%, and VA or USDA loans may offer zero down options for eligible buyers.

Most lenders require two years of tax returns, recent pay stubs, bank statements, and proof of employment. Self-employed borrowers may need additional documentation like profit and loss statements or business returns.

From application to closing typically takes 30-45 days for purchase transactions. Refinances may move faster. Timeline depends on loan type, documentation completeness, and appraisal scheduling.

Pre-qualification is an estimate based on self-reported information. Pre-approval involves document verification and credit review, giving you a stronger position when making offers on Rancho Cordova properties.

Yes. Self-employed buyers can use bank statement loans, 1099 loans, or profit and loss statement programs. These options verify income through deposits or business financials rather than W-2s.

Closing costs include lender fees, title insurance, escrow fees, and prepaid items. Buyers typically pay 2-5% of the purchase price. Exact amounts vary by loan type and transaction details.

Fixed-rate mortgages maintain the same payment for the entire term. ARMs start with lower rates that adjust periodically. Your choice depends on how long you plan to own the property.

Private mortgage insurance protects lenders when you put down less than 20%. You can avoid PMI by making a larger down payment, using VA loans, or choosing lender-paid options.

Yes, most loan programs allow gift funds from family members. You'll need a gift letter stating the money doesn't require repayment, plus documentation showing the funds transfer.

Local brokers understand Sacramento County market conditions and have relationships with area appraisers and title companies. We access multiple lenders to find competitive rates and match programs to your situation.

Rates vary by borrower profile and market conditions. Government-backed loans like FHA often have competitive rates. Conventional and jumbo loans may differ based on credit score and down payment.

Yes. Investment property loans typically require larger down payments (15-25%) and have slightly higher rates. DSCR loans evaluate the property's rental income rather than your personal income.

DSCR loans qualify investors based on property cash flow instead of personal income. They're ideal for investors with multiple properties or those who want to avoid extensive income documentation.

Some areas near Rancho Cordova may qualify for USDA rural development loans. These offer zero down payment for eligible buyers meeting income limits. Specific address eligibility must be verified.

FHA loans allow lower credit scores (580 minimum) and small down payments (3.5%). They're ideal for first-time buyers or those with limited savings or credit challenges.

VA loans offer qualified veterans and active service members zero down payment, no PMI, and competitive rates. California also provides additional veteran benefits through CalVet loan programs.

Jumbo loans exceed conforming loan limits set by Fannie Mae and Freddie Mac. In Sacramento County, these limits change annually. Jumbo loans typically require stronger credit and larger down payments.

Bank statement loans use 12-24 months of personal or business bank deposits to calculate income. Lenders typically use a percentage of average monthly deposits, making them ideal for self-employed borrowers.

Yes. 1099 loans verify income through your 1099 forms rather than W-2s or tax returns. They're designed for contractors, freelancers, and gig workers with consistent 1099 income.

ITIN loans allow borrowers without Social Security numbers to qualify using Individual Taxpayer Identification Numbers. Requirements include valid ITIN, qualifying credit history, and standard documentation.

Bridge loans provide short-term financing when you need to buy before selling your current home. They use equity from your existing property and typically convert to permanent financing after your sale.

HELOCs provide a revolving credit line you can draw from as needed. Home equity loans give you a lump sum upfront. Both use your home's equity as collateral.

Paying points means prepaying interest to reduce your rate. This makes sense if you plan to keep the loan long enough to recoup the upfront cost through lower payments.

Interest-only loans let you pay just interest for an initial period, typically 5-10 years. Payments increase when principal payments begin. They're common for high-income borrowers expecting income growth.

Waiting periods apply after bankruptcy. FHA requires two years after Chapter 7, four years after Chapter 13 dismissal. Some alternative programs may have more flexible timelines with compensating factors.

Construction loans fund building costs in stages as work progresses. They typically convert to permanent mortgages upon completion. Requirements include approved plans, qualified contractors, and sufficient down payment.

Asset depletion loans qualify borrowers based on liquid assets rather than income. Lenders calculate monthly income by dividing assets by the loan term, ideal for retirees or those with substantial savings.

Yes. Lenders require proof of homeowners insurance before funding your loan. You'll need coverage that meets lender requirements and typically must prepay the first year's premium at closing.

Lenders order appraisals from licensed professionals who evaluate your property's market value. The appraisal protects both you and the lender by confirming the purchase price aligns with actual value.

Some government-backed loans like FHA and VA are assumable with lender approval. Assuming a mortgage with a lower rate can save money, but you must qualify and pay the seller's equity.

A rate lock guarantees your interest rate for a specific period, typically 30-60 days. Lock when you're satisfied with the rate and timeline, protecting against increases during your transaction.

Foreign national loans don't require U.S. citizenship or credit history. Requirements typically include larger down payments, valid visa or passport, and proof of income or assets from your home country.

Lenders must provide specific denial reasons. Common issues include credit problems, insufficient income, or high debt ratios. An experienced broker can suggest alternative programs or help you address qualification issues.