Gilroy Mortgage FAQs: Your Complete Guide to Home Financing in Santa Clara County

Gilroy buyers can access conventional, FHA, VA, USDA, and jumbo loans. Investors and self-employed buyers have specialized options like DSCR and bank statement loans. Your best choice depends on your financial profile and property goals.

Down payments vary by loan type. Conventional loans may require 3-20%, FHA loans need 3.5%, and VA or USDA loans can require zero down. Rates vary by borrower profile and market conditions.

Most conventional loans require a 620 minimum credit score. FHA loans may accept scores as low as 580 with 3.5% down. Higher scores typically unlock better rates and terms.

The process typically takes 30-45 days from application to closing. Pre-approval can happen within 24-48 hours. Working with a local lender familiar with Santa Clara County can help streamline your timeline.

You'll need recent pay stubs, W-2s, tax returns, bank statements, and identification. Self-employed buyers may need additional documentation like profit and loss statements. Having these ready speeds up your application.

Yes, first-time buyers can access FHA loans, USDA loans in eligible areas, and community mortgage programs. Some California state programs may also apply. These often feature lower down payments or reduced fees.

FHA loans require lower credit scores and down payments but include mortgage insurance. Conventional loans offer more flexibility and may eliminate PMI sooner. Your situation determines which option works best.

Absolutely. Self-employed buyers can use bank statement loans, profit and loss statement loans, or 1099 loans. These programs verify income through deposits rather than traditional tax returns.

Closing costs typically range from 2-5% of the loan amount. They include appraisal fees, title insurance, escrow fees, and lender charges. Some costs may be negotiable with the seller.

PMI is private mortgage insurance required when you put down less than 20% on a conventional loan. You can avoid it with a 20% down payment, VA loan, or piggyback loan structure.

Fixed-rate mortgages provide stable payments for the loan term. ARMs start with lower rates that adjust periodically. Consider how long you plan to stay in your home when choosing.

Jumbo loans exceed conforming loan limits set by federal guidelines. In Santa Clara County, these limits are higher than many areas. You'll need one if your loan amount surpasses the local conforming limit.

Yes, and pre-approval is highly recommended. It shows sellers you're a serious buyer and helps you understand your budget. The process is quick and strengthens your offer in competitive situations.

DSCR loans are for investment properties and qualify based on rental income, not personal income. They're ideal for investors building portfolios. The property's cash flow determines eligibility.

Yes, eligible veterans and service members can use VA loans in Gilroy. These loans require no down payment and no monthly mortgage insurance. They often feature competitive rates and flexible qualification standards.

USDA loans offer zero down payment financing for eligible rural and suburban properties. Some Gilroy areas may qualify depending on location. Income limits apply, so check your eligibility early.

Lenders typically prefer a DTI ratio below 43%, though some programs allow higher. This ratio compares your monthly debt payments to gross income. Lower ratios improve your approval odds and rate options.

Yes, investment properties can be financed through conventional loans, DSCR loans, or portfolio loans. Investment loans typically require larger down payments and have different qualification criteria than primary residences.

Interest-only mortgages let you pay only interest for a set period, reducing initial payments. They suit buyers expecting income growth or investors maximizing cash flow. Principal payments begin after the interest-only period ends.

Buying points means paying upfront to reduce your interest rate. Each point typically costs 1% of the loan amount. This makes sense if you plan to keep the loan long enough to recoup the cost.

Bridge loans provide short-term financing to buy a new home before selling your current one. They help buyers move quickly in competitive markets. These loans typically have higher rates and shorter terms.

Yes, foreign national loan programs serve non-U.S. citizens purchasing property. These require larger down payments and have specific documentation requirements. Both resident and non-resident aliens may qualify.

ITIN loans serve borrowers with Individual Taxpayer Identification Numbers instead of Social Security numbers. They allow non-citizens to purchase homes. Documentation requirements differ from traditional loans but approval is possible.

The appraisal determines your home's market value and must meet or exceed your purchase price for full financing. Low appraisals may require larger down payments or price renegotiation. Lenders order appraisals to protect their investment.

Conforming loans meet federal guidelines and loan limits set for your county. Jumbo loans exceed these limits and have stricter requirements. Santa Clara County has higher conforming limits than many California counties.

Yes, refinancing can lower your rate, change your term, or access equity. You can refinance when rates drop or your financial situation improves. Consider closing costs when calculating potential savings.

Bank statement loans verify income through bank deposits rather than tax returns. Self-employed borrowers and business owners often benefit. Lenders typically review 12-24 months of statements.

Property taxes are based on assessed value and local rates. They're typically paid through your monthly mortgage payment into an escrow account. Your lender pays the county on your behalf when due.

Pre-qualification is an estimate based on self-reported information. Pre-approval involves documentation review and credit checks, carrying more weight with sellers. Always get pre-approved before making offers.

Yes, most loan programs allow gift funds from family members for down payments. Donors must provide a gift letter stating the money doesn't require repayment. Documentation of the transfer is required.

Denial isn't permanent. Review the reasons, improve credit, reduce debt, or save more for down payment. Alternative loan programs may offer approval when conventional loans don't. A local broker can explore all options.

Fifteen-year mortgages have higher payments but lower total interest and faster equity building. Thirty-year loans offer lower payments and more flexibility. Your budget and long-term goals should guide your choice.

Homeowners insurance protects against property damage and liability. Lenders require it to protect their investment. You'll pay premiums monthly through escrow or annually depending on your preference.

Yes, rate locks protect you from increases during your loan process. Locks typically last 30-60 days. Your lender will explain timing and any costs associated with extended locks.

Asset depletion loans qualify you based on liquid assets rather than income. They suit retirees or high-net-worth individuals with significant savings. Lenders calculate monthly income by dividing assets over the loan term.

Gilroy often offers more affordable options compared to northern Santa Clara County cities. The community provides small-town character with access to Bay Area employment. Property types and neighborhoods vary throughout the city.

A HELOC is a revolving credit line secured by your home equity. You can access funds as needed during the draw period. They're useful for renovations, debt consolidation, or emergency expenses.

Various California state and county programs may offer down payment help. Eligibility often depends on income, property location, and first-time buyer status. These programs can make homeownership more accessible.

New construction financing may involve construction loans or builder-specific programs. Timelines differ from resale purchases. Ensure your lender understands construction lending and can coordinate with builders.

SRK Capital offers personalized service, multiple loan programs, and local market expertise. We guide you through the entire process and help you find the best financing solution. Our team understands Santa Clara County buyers' unique needs.