August 21st, 2012 4:05 PM by Nathan Rufty
In reality, the state of California is one of the most difficult real estate areas in the entire country with more than thirty five million people a huge percentage of which continues to move around and buy properties. If you currently live in California and you plan to buy your own home or you are seriously considering moving over to the state, make sure that you do a comprehensive study of the various California home loan offers to make sure that you get the most out of the loan program you opt for.
Unlike in the previous decade, after the mortgage meltdown, there have been significant changes in the California home loan industry – it has become a little bit more limiting. The credit rating of a home loan applicant and his over-all credit circumstance now takes precedence over other considerations unless otherwise the applicant is willing to shell out a large amount on down payment. In fact, interest rates are generally based on the individual’s credit scores as generated by the credit bureaus and FICO. So if you carry a not-so-enticing credit score but you intend to put down a solid down payment,
California home loan providers will most likely be flexible with their terms especially if you have an outstanding debt-to-income ratio. Yes, home loan providers (for first-time and repeat home buyers) and California refinance companies (for those who already have existing loans but intend to reduce their monthly repayments) include in their assessment your ongoing debts in relation to your income. This means if your credit card payments and your auto loan is eating too much of your current salary, it would be very difficult for you to qualify for a California home loan. Difficult, but not impossible.
FHA loans here in California vary based on the kind of loan one applies for. What is great about California FHA loans limit is that it requires a meager 3.5% down payment only, not a very difficult one to produce for a frugal middle class worker in comparison with the 10% down payment required in conventional home loans. Many lenders fully understand the huge responsibility that is encapsulated in buying one’s home and that is the reason why a few will be willing to stretch out their rules a bit. But of course, you need to convince them that you are a responsible borrower.