San Diego Mortgage FAQs: Your Complete Guide to Home Financing

Most mortgage applications take 30-45 days from application to closing. The timeline depends on your documentation readiness, property type, and loan program selected.

FHA loans require minimum 580 credit scores with 3.5% down. Conventional loans typically need 620 or higher. Some specialized programs accept lower scores with compensating factors.

Down payments range from 0% for VA and USDA loans to 3% for conventional and 3.5% for FHA. Jumbo loans often require 10-20% depending on loan amount and property type.

You'll need two years of tax returns, recent pay stubs, bank statements, photo ID, and employment verification. Self-employed buyers may need additional business documentation.

Yes, self-employed buyers have multiple options including bank statement loans, P&L statement loans, and 1099 loans. These programs evaluate income differently than traditional W-2 mortgages.

Closing costs typically run 2-5% of the purchase price. This includes lender fees, title insurance, escrow fees, appraisal costs, and prepaid items like property taxes and insurance.

Fixed rates provide payment stability for the loan term. ARMs start with lower rates that adjust periodically. Your choice depends on how long you plan to own the property.

FHA loans require lower credit scores and down payments but include mortgage insurance for the loan life. Conventional loans offer more flexibility and lower costs with strong credit.

Active military, veterans, and eligible spouses qualify for VA loans with no down payment required. You'll need a Certificate of Eligibility and meet credit and income requirements.

Jumbo loans exceed conforming loan limits set by Fannie Mae and Freddie Mac. In San Diego, many properties require jumbo financing due to higher home values throughout the county.

Yes, investment property loans are available with higher down payments and interest rates. DSCR loans evaluate rental income instead of personal income for qualifying.

Private mortgage insurance protects lenders when down payments fall below 20%. You can avoid PMI with 20% down, piggyback loans, or VA/USDA programs.

Lenders compare your monthly debt payments to gross income. Most programs allow DTI ratios up to 43-50%, though specific limits vary by loan type and compensating factors.

Pre-approval is strongly recommended in San Diego's competitive market. It shows sellers you're a serious buyer and helps you understand your budget before making offers.

Points are prepaid interest that lower your rate. Each point costs 1% of the loan amount. They make sense if you plan to keep the loan long enough to recoup the upfront cost.

Bank statement loans use 12-24 months of business or personal bank deposits to calculate income. They're ideal for self-employed buyers with significant business write-offs.

Debt Service Coverage Ratio loans qualify investors based on property rental income rather than personal income. No tax returns or employment verification required.

Yes, foreign national loans are available for non-U.S. citizens purchasing property. These programs typically require larger down payments and use international credit history.

ITIN loans serve borrowers without Social Security numbers who have Individual Taxpayer Identification Numbers. These programs use ITIN for credit and income verification.

Hard money loans focus on property value rather than borrower credit. They close faster but carry higher rates and shorter terms, ideal for fix-and-flip investors.

HELOCs provide flexible access to home equity with variable rates. You draw funds as needed during the draw period and pay interest only on amounts used.

Bridge loans help buyers purchase before selling their current home. They provide short-term financing secured by your existing property until the sale completes.

Interest-only loans require only interest payments for an initial period, typically 5-10 years. Principal payments begin after the interest-only period ends.

First-time buyers can access FHA loans with 3.5% down, conventional loans with 3% down, and various state and local assistance programs for down payment help.

Construction loans provide funding in stages as building progresses. They typically convert to permanent mortgages once construction completes and the home receives a certificate of occupancy.

Asset depletion loans qualify borrowers using investment accounts and assets rather than traditional income. The lender divides assets by the loan term to calculate monthly income.

PMI can be removed once you reach 20% equity through payments or appreciation. Contact your lender to request removal or consider refinancing if rates are favorable.

At closing, you'll sign final documents, pay closing costs, and receive keys. California uses escrow companies to coordinate the process between buyers, sellers, and lenders.

Rate locks guarantee your interest rate for a specified period, typically 30-60 days. Rates vary by borrower profile and market conditions at the time of locking.

Refinancing makes sense when you can lower your rate, reduce payment terms, or access equity. Calculate break-even points to ensure savings justify closing costs.

Portfolio loans are held by the lender rather than sold to investors. This allows more flexible underwriting for unique properties or borrower situations not fitting conventional guidelines.

Reverse mortgages convert home equity into income for homeowners 62 and older. The loan is repaid when you sell, move, or pass away. No monthly payments required.

Community mortgages consider non-traditional factors like rent payment history and utility bills. They help borrowers with limited credit history qualify for homeownership.

Some programs accept borrowers with past credit challenges. Waiting periods vary by event type and loan program. Alternative documentation loans may offer faster qualification paths.

Lenders typically want two years of stable employment. Gaps require explanation and may need additional documentation. Self-employed alternatives exist for non-traditional work histories.