San Carlos Mortgage FAQs: Expert Answers from SRK Capital

Down payment requirements vary by loan type. Conventional loans typically require 5-20%, FHA loans need 3.5%, and VA or USDA loans may require zero down. Your specific amount depends on the loan program and property type.

Most conventional loans require a 620 minimum credit score, while FHA loans may accept scores as low as 580. Higher scores typically unlock better interest rates. Rates vary by borrower profile and market conditions.

Most purchase transactions close in 30-45 days from offer acceptance. Timeline depends on loan complexity, appraisal scheduling, and document preparation. Working with a local broker can streamline the process.

Standard documents include two years of tax returns, recent pay stubs, bank statements, photo ID, and employment verification. Self-employed borrowers may need additional business documentation depending on the loan type.

Yes, jumbo loans are frequently used in San Mateo County due to higher property values. These loans exceed conforming limits and typically require stronger credit and larger down payments than conventional mortgages.

FHA loans allow lower credit scores and smaller down payments but require mortgage insurance for the loan's life. Conventional loans offer more flexibility and can eliminate PMI once you reach 20% equity.

Yes, eligible veterans and service members can use VA loans with zero down payment and no PMI. VA loans offer competitive rates and are available for primary residences throughout San Carlos.

Closing costs typically range from 2-5% of the purchase price. This includes lender fees, title insurance, escrow fees, and prepaid items. Your lender provides a detailed estimate within three business days of application.

Paying points reduces your rate but increases upfront costs. This makes sense if you plan to keep the loan long enough to recoup the expense through lower monthly payments.

PMI protects the lender if you default on a conventional loan with less than 20% down. It typically costs 0.5-1.5% of the loan amount annually and can be removed once you reach 20% equity.

Even small rate changes significantly impact monthly payments on large loans. A 0.5% rate increase on a $1 million loan adds roughly $300 to your monthly payment. Rates vary by borrower profile and market conditions.

Yes, self-employed borrowers have multiple options including bank statement loans, P&L statement loans, and asset depletion programs. These alternative documentation loans accommodate non-traditional income verification.

DSCR (Debt Service Coverage Ratio) loans qualify you based on rental income rather than personal income. They're popular for San Carlos investment properties and don't require tax returns or employment verification.

Many loan programs require 2-6 months of mortgage payment reserves in savings after closing. Investment properties and multi-unit homes typically need larger reserve amounts than single-family primary residences.

Fifteen-year mortgages have higher monthly payments but lower total interest costs and faster equity building. Thirty-year loans offer more affordable payments and greater monthly cash flow flexibility.

Yes, FHA loans allow 2-4 unit properties if you occupy one unit as your primary residence. This strategy helps buyers offset mortgage costs with rental income while building equity.

ARMs offer lower initial rates that adjust after a fixed period based on market indexes. Common options include 5/1, 7/1, and 10/1 ARMs, suitable for buyers planning to sell or refinance before adjustment.

Lenders typically prefer total debt payments below 43-50% of gross monthly income. This includes your future mortgage, credit cards, auto loans, and other obligations. Lower ratios improve approval odds.

Yes, ITIN loans allow buyers without Social Security numbers to purchase homes. These programs use alternative documentation and are available for primary residences and investment properties throughout California.

Bank statement loans qualify borrowers using 12-24 months of personal or business bank deposits rather than tax returns. They're ideal for self-employed buyers with business write-offs that reduce taxable income.

Pre-approval is stronger because it involves credit checks and document verification. Pre-qualification provides an estimate but doesn't carry the same weight with sellers in competitive San Carlos markets.

A rate lock guarantees your interest rate for a specific period, typically 30-60 days. Lock when you're satisfied with the rate and close to closing to protect against market increases.

On refinances you can sometimes roll costs into the loan amount. For purchases, sellers can contribute toward your closing costs, but you cannot typically finance them into the mortgage directly.

The interest rate is your borrowing cost, while APR includes the rate plus lender fees and closing costs. APR provides a more complete picture of total loan expense for comparison shopping.

Conventional loans eliminate PMI with 20% down. However, alternatives like piggyback loans or lender-paid PMI programs can help you avoid monthly PMI with less than 20% down.

Bridge loans provide short-term financing to buy a new home before selling your current one. They help San Carlos buyers compete in fast markets without sale contingencies but require qualifying for both mortgages.

Yes, foreign national loans allow non-U.S. citizens to purchase California real estate. These programs use U.S. credit and assets for qualification and work for both primary homes and investment properties.

Portfolio ARMs are adjustable-rate loans kept by lenders rather than sold to investors. They offer flexibility in underwriting and can accommodate unique financial situations that don't fit conventional guidelines.

Interest-only loans let you pay just interest for an initial period, reducing monthly payments. After the interest-only period ends, payments increase to include principal. They're popular with high-income buyers managing cash flow.

Recent bankruptcies, foreclosures, collections, and high debt ratios can complicate approval. Most issues become less problematic with time, larger down payments, or alternative loan programs designed for credit challenges.

Conventional investment property loans typically require 15-25% down depending on property type and borrower qualifications. DSCR and other portfolio loans may offer additional flexibility for experienced investors.

An appraiser inspects the property and compares it to recent sales to determine market value. The lender uses this to ensure the property value supports the loan amount requested.

Mortgage brokers like SRK Capital access multiple lenders and loan programs, often finding better rates and terms than single-lender options. Brokers especially benefit self-employed buyers and those needing specialized loan products.