Question 1

How long does a mortgage application take in Sacramento?

Accepted Answer

Most Sacramento purchases close in 30-35 days. Refinances often finish in 21-25 days since no purchase contract drives the timeline.

Question 2

What credit score do I need to buy a home in Sacramento?

Accepted Answer

FHA loans accept 580 credit scores with 3.5% down. Conventional loans need 620 minimum, though 680+ gets you noticeably better rates.

Question 3

How much down payment is required in Sacramento County?

Accepted Answer

FHA requires 3.5% down. Conventional loans allow 3% for first-time buyers. Investors need 15-25% depending on the property type.

Question 4

What documents do I need to apply for a mortgage?

Accepted Answer

Bring two years of W-2s, two months of bank statements, and recent pay stubs. Self-employed borrowers need two years of tax returns plus a year-to-date P&L.

Question 5

Can I use a bank statement loan if I'm self-employed?

Accepted Answer

Yes. We need 12-24 months of business or personal bank statements. Lenders calculate income from deposits, not tax returns.

Question 6

What are closing costs on a Sacramento home purchase?

Accepted Answer

Expect 2-3% of the purchase price. That includes lender fees, title insurance, escrow, and prepaid property taxes.

Question 7

Is Sacramento a good market for FHA loans?

Accepted Answer

Yes. Sacramento prices fit comfortably under FHA loan limits. Many first-time buyers use FHA to get in with lower credit and smaller down payments.

Question 8

What's the FHA loan limit in Sacramento County as of February 2026?

Accepted Answer

Check current limits annually, as they adjust with home prices. Sacramento typically uses the standard baseline limit, not high-cost tiers.

Question 9

Do I need mortgage insurance if I put down less than 20%?

Accepted Answer

Yes. Conventional loans require PMI until you hit 20% equity. FHA charges both upfront and monthly mortgage insurance regardless of down payment.

Question 10

Can I remove PMI after my home value increases?

Accepted Answer

Conventional PMI drops off automatically at 78% loan-to-value. You can request removal at 80% with a new appraisal if the home appreciated.

Question 11

What's the difference between FHA and conventional loans?

Accepted Answer

FHA accepts lower credit scores and smaller down payments but charges mortgage insurance for life on some loans. Conventional offers better rates for strong credit.

Question 12

Should I choose a 15-year or 30-year mortgage?

Accepted Answer

15-year loans save massive interest but double your monthly payment. Most Sacramento buyers pick 30-year terms for cash flow flexibility.

Question 13

What is a DSCR loan and who should use it?

Accepted Answer

DSCR loans qualify you based on rental income, not personal income. Investors with multiple properties use these to avoid tax return complications.

Question 14

Can I buy a rental property in Sacramento with a DSCR loan?

Accepted Answer

Yes. We close DSCR loans on Sacramento rentals regularly. You need 20-25% down and the property must generate enough rent to cover the mortgage.

Question 15

What is an adjustable rate mortgage and when does it make sense?

Accepted Answer

ARMs start with lower rates that adjust after 5, 7, or 10 years. They work if you plan to sell or refinance before the rate adjusts.

Question 16

Are interest rates expected to drop in 2026?

Accepted Answer

Federal Reserve officials project multiple rate cuts later this year, though timing remains uncertain. Rates vary by borrower profile and market conditions.

Question 17

Can I use cryptocurrency assets to qualify for a mortgage?

Accepted Answer

Some non-QM lenders now accept verified crypto holdings as reserves or income. This works for borrowers with substantial digital asset portfolios.

Question 18

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

Accepted Answer

Jumbo loans exceed conforming limits, which are higher than most Sacramento home prices. You'd need one for purchases above county conforming caps.

Question 19

Can I get a VA loan in Sacramento if I'm active military?

Accepted Answer

Yes. VA loans require no down payment and no monthly mortgage insurance. Sacramento has a strong military presence, so VA loans are common here.

Question 20

What is a USDA loan and can I use it near Sacramento?

Accepted Answer

USDA loans offer zero down payment for rural properties. Some outer Sacramento County areas qualify, but most of the city itself does not.

Question 21

How do bridge loans work for Sacramento buyers?

Accepted Answer

Bridge loans let you buy before selling your current home. You pay higher short-term rates but avoid contingent offers in competitive markets.

Question 22

What is an asset depletion loan?

Accepted Answer

Lenders calculate income by dividing your liquid assets by 360 months. Retirees or high-net-worth borrowers use these when tax returns show low income.

Question 23

Can I qualify for a mortgage using only 1099 income?

Accepted Answer

Yes. 1099 loans use your gross 1099 income without typical self-employed deductions. You'll need 12-24 months of history in the same field.

Question 24

What is a portfolio ARM and who offers them?

Accepted Answer

Portfolio ARMs are held by individual lenders, not sold to Fannie or Freddie. They offer flexible underwriting for borrowers who don't fit standard boxes.

Question 25

Do I need a larger down payment for a condo in Sacramento?

Accepted Answer

Not usually. Conventional and FHA allow the same down payments on condos as houses, assuming the HOA is approved by the lender.

Question 26

Can I buy a multi-family property with an FHA loan?

Accepted Answer

Yes, up to four units if you live in one. FHA lets you use projected rental income to help qualify for the loan.

Question 27

What's the difference between a HELOC and a home equity loan?

Accepted Answer

HELOCs work like credit cards with variable rates you draw from as needed. Home equity loans give you a lump sum with a fixed rate.

Question 28

How do construction loans work in Sacramento?

Accepted Answer

Construction loans fund the build in stages called draws. Once complete, they convert to permanent mortgages or require a separate take-out loan.

Question 29

What is an ITIN loan and who qualifies?

Accepted Answer

ITIN loans serve borrowers without Social Security numbers. You need an Individual Taxpayer Identification Number, proof of income, and 15-20% down.

Question 30

Can foreign nationals get mortgages in Sacramento?

Accepted Answer

Yes. Foreign national loans require 20-30% down and don't need U.S. credit history. We use international income docs and bank statements.

Question 31

What are hard money loans and when should I consider one?

Accepted Answer

Hard money loans close fast based on property value, not credit. Investors use them for fix-and-flip deals or when speed beats rate.

Question 32

Should I pay points to lower my interest rate?

Accepted Answer

Each point costs 1% of the loan and drops your rate roughly 0.25%. It makes sense if you'll keep the loan long enough to recover the upfront cost.

Question 33

What's the best neighborhood in Sacramento for first-time buyers?

Accepted Answer

Pockets, Curtis Park, and Tahoe Park offer walkable streets and older homes at moderate prices. Natomas has newer builds with lower maintenance.

Question 34

How competitive is the Sacramento housing market right now?

Accepted Answer

Less competitive than 2021-2022, but good homes still move fast. Strong preapproval and clean financing help you win without waiving contingencies.

Question 35

Can I waive the appraisal contingency in Sacramento?

Accepted Answer

You can, but lenders still require an appraisal. If it comes in low, you'll need extra cash to cover the gap or renegotiate the price.

Question 36

What happens if my Sacramento home appraises below the purchase price?

Accepted Answer

You can renegotiate the price, bring more cash, or walk away if you kept the appraisal contingency. Lenders won't fund the difference.

Question 37

How long does it take to get preapproved?

Accepted Answer

Same day if your documents are ready. We review credit, income, and assets, then issue a preapproval letter within a few hours.

Question 38

Does shopping for mortgage rates hurt my credit score?

Accepted Answer

No. Multiple mortgage inquiries within 45 days count as one hard pull. Shop rates freely during that window without score damage.

Question 39

Can I buy a fixer-upper with a conventional loan?

Accepted Answer

Only if it's habitable and meets lender property standards. Non-habitable homes need renovation loans like FHA 203k or conventional HomeStyle.

Question 40

What is a reverse mortgage and who qualifies?

Accepted Answer

Reverse mortgages let homeowners 62+ borrow against home equity without monthly payments. The loan is repaid when you sell or pass away.

Sacramento Mortgage FAQs — Answers from Experienced Local Brokers