Sacramento Mortgage FAQs: Your Questions Answered by Local Experts

Most Sacramento home purchases close in 30-45 days from offer acceptance. Pre-approval can happen in 24-48 hours with complete documentation. Working with a local broker often speeds up the process.

FHA loans accept scores as low as 580 with 3.5% down. Conventional loans typically require 620 or higher. Better scores unlock lower rates and more favorable terms.

Down payments range from 0% for VA and USDA loans to 3% for conventional first-time buyers. FHA requires 3.5% minimum. Investment properties typically need 15-25% down.

Yes, Sacramento County offers down payment assistance and CalHFA programs for eligible buyers. FHA and conventional 3% down options also help first-timers. Your lender can identify programs you qualify for.

Bring two years of tax returns, recent pay stubs, bank statements, and photo ID. Self-employed buyers need additional business documentation. Complete documents speed up approval significantly.

FHA loans accept lower credit scores and require just 3.5% down but include mortgage insurance. Conventional loans offer better rates for strong credit and allow canceling PMI. Your situation determines the best fit.

Yes, FHA loans accept scores as low as 580, and some portfolio lenders go lower. Subprime options exist but carry higher rates. Working to improve credit before buying typically saves money long-term.

Closing costs typically run 2-5% of the purchase price in Sacramento. This includes lender fees, title insurance, escrow, and recording fees. Sellers sometimes contribute to reduce buyer costs.

You'll pay PMI on conventional loans with less than 20% down. FHA requires mortgage insurance regardless of down payment. VA loans charge a funding fee but no monthly insurance.

Natomas, Pocket-Greenhaven, and South Sacramento offer more affordable entry points. Midtown and East Sacramento cost more but provide walkability. Your budget and lifestyle determine the best fit.

Yes, Sacramento has a strong military presence and VA loans are widely accepted. Veterans enjoy 0% down, no PMI, and competitive rates. SRK Capital specializes in VA financing for Sacramento buyers.

Income requirements depend on purchase price and debt obligations. Lenders want housing costs under 28% of gross income. A $400,000 home typically requires $80,000-$90,000 annual income.

Get pre-approved before house hunting in Sacramento's competitive market. Pre-approval verifies income and credit, making offers stronger. Pre-qualification is just an estimate without verification.

Absolutely. Bank statement loans, 1099 loans, and P&L statement programs serve self-employed buyers. These alternatives look at deposits rather than tax returns. Rates vary by borrower profile and market conditions.

Points are upfront fees to reduce your interest rate, costing 1% of loan amount per point. They make sense if you'll keep the loan 5+ years. Short-term owners should skip points.

Rates are set nationally, not locally, but Sacramento's market affects buying power. Rates vary by borrower profile and market conditions. Local competition can influence lender fees and programs offered.

Yes, Sacramento attracts investors with strong rental demand. Investment properties require 15-25% down and higher rates. DSCR loans allow qualification based on rental income, not personal income.

DSCR loans qualify investors based on property cash flow, not personal income. They're perfect for self-employed investors or those with multiple properties. Sacramento's rental market supports strong DSCR ratios.

Lenders allow housing costs up to 28% of gross monthly income, or 43% including all debts. A $6,000 monthly income supports roughly $350,000-$400,000 purchase. Online calculators provide rough estimates.

Fixed-rate mortgages maintain the same payment for 15-30 years. ARMs offer lower initial rates but adjust after 5-10 years. ARMs suit buyers planning to sell or refinance within several years.

Yes, foreign national loans serve non-US citizens buying Sacramento property. These require 20-30% down and proof of foreign income. SRK Capital offers specialized foreign national programs.

Bank statement loans qualify self-employed borrowers using 12-24 months of business deposits. They replace traditional tax returns for income verification. Rates are slightly higher than conventional loans.

Local brokers understand Sacramento's market nuances and have relationships with area lenders. We know neighborhood values and can expedite appraisals. Local expertise often means smoother transactions.

ITIN loans serve borrowers without Social Security numbers who have Individual Taxpayer Identification Numbers. They require documented income and typically 15-20% down. These help non-citizens achieve Sacramento homeownership.

Refinancing makes sense if you can lower your rate by 0.75% or more. Consider closing costs and how long you'll keep the home. Cash-out refinances tap equity for renovations or debt consolidation.

Jumbo loans exceed conforming limits, currently $766,550 in Sacramento County. They require excellent credit, larger down payments, and more reserves. Many Sacramento neighborhoods need jumbo financing.

Yes, construction loans fund building new homes or major renovations in Sacramento. They convert to permanent mortgages after completion. These require detailed plans, contractor agreements, and larger down payments.

Bridge loans provide short-term financing when buying before selling your current home. They're common in competitive markets where contingent offers don't win. Terms typically last 6-12 months with higher rates.

Interest-only mortgages let you pay just interest for 5-10 years before principal payments begin. They suit high earners expecting income growth or those maximizing cash flow. Monthly payments jump significantly after the interest-only period.

Portfolio ARMs are adjustable-rate mortgages held by the lender rather than sold to investors. They offer flexible qualifying and custom terms. Sacramento investors and self-employed buyers often benefit from portfolio products.

Yes, lenders include student loan payments in debt-to-income calculations. Income-based repayment plans show lower obligations. Strong income and credit scores offset higher debt loads.

Assumable mortgages let buyers take over the seller's existing loan, potentially keeping a lower rate. FHA and VA loans are assumable with lender approval. The buyer must qualify and pay the seller's equity.

California's Proposition 13 caps property tax increases at 2% annually. Sacramento County's base rate is around 1.1% of assessed value. Most lenders require escrow accounts that include property taxes in monthly payments.

Homeowner association fees cover shared amenities and maintenance in condos and planned communities. Lenders include HOA fees in debt-to-income ratios. High HOA fees reduce the loan amount you qualify for.

Yes, FHA 203(k) loans fund purchase plus renovations in one loan. Conventional renovation loans also exist. The property must meet minimum safety standards, and renovations require detailed contractor bids.

Rate locks guarantee your mortgage rate for 30-60 days while processing your loan. Lock when rates are favorable and you've found a home. Rates vary by borrower profile and market conditions.

Yes, all lenders require homeowners insurance before closing. California wildfire risk makes coverage essential in Sacramento area. Lenders verify insurance annually and can force-place expensive policies if coverage lapses.

One late payment (30+ days) damages credit scores significantly and incurs late fees. Multiple missed payments lead to foreclosure proceedings. Contact your lender immediately if you anticipate payment problems.

Yes, but waiting periods apply: 2-4 years after bankruptcy, 3-7 years after foreclosure depending on loan type. FHA offers shorter waiting periods than conventional loans. Strong credit rebuilding improves approval chances.

Brokers access multiple lenders and find the best fit for your situation. Banks offer only their own products. Brokers often secure better rates and terms through lender relationships and shopping power.