Obtaining a home mortgage loan in California is especially challenging. Why? Because, the average home price in California is $440,000; in the rest of the country it’s $180,000. That’s 2.5 times higher than the rest of the nation.[i]
Despite this, obtaining a home mortgage loan in California is not impossible – even for first time buyers. When you’re buying a home in California, what you need is basic information about mortgage rates, debt, credit, and online mortgage pre approval in California.
Why is credit important?
When you apply for a mortgage for buying a home in California, a lender wants to know whether you pay your bills promptly. If you’re typically late with car payments, student loans, or credit cards, these late payments are reported to the national credit-reporting agencies. When a lender sees your credit report, it gives them a picture of whether you’re likely to repay a large mortgage on time.
Consider these steps before you apply for a mortgage for buying a home in California:
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Get a copy of your credit report. California residents are entitled to a free report annually. The California Department of Consumer Affairs can tell you how to get your report.
- If your report shows many late payments, don’t despair. We can provide guidance about repairing your credit. Call us at (800) 930-8195.
How does debt affect getting a home mortgage loan in California?
When you’re buying a home in California, the lender also wants to know if you have sufficient income to repay a mortgage.
If you make a decent salary but the majority goes toward existing debts, a lender might think giving you a mortgage is risky. A low debt level can improve your chances.
Here are some ways to deal with debt:
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Add all of your monthly debts. Divide the total by your monthly income before taxes are subtracted.
- If the result is below 43%, most loan programs consider this an average level of debt. If your result is higher, considering repaying debt before applying.
What do I need to know about mortgage rates?
A combination of low debt and good credit can help you to obtain lower mortgage rates. A low interest rate improves your chances for a larger mortgage loan – which can be especially helpful given California’s home prices.
EZ Online Mortgage prides itself on its low interest rates; we’ll try to match or beat any written mortgage quote. For more information, call us at (800) 930-8195.
What is mortgage pre approval?
A mortgage pre approval estimates what size mortgage you can obtain; it gives you an idea of your price range so you can begin home shopping. Don’t confuse our online mortgage pre approval in California with a mortgage commitment though; a mortgage pre approval is only a preliminary estimate.
Our online mortgage pre approval in California is a convenient way to determine how much you can borrow. EZ Online Mortgage also provides you with all the support you need while you’re obtaining a mortgage. In addition to answering your questions and providing information, we walk with you every step of your journey toward home ownership in California.
[1] California’s High Housing Costs: Causes and Consequences, The California Legislature’s Nonpartisan Fiscal Policy Advisor, http://www.lao.ca.gov/reports/2015/finance/housing-costs/housing-costs.aspx, Consulted Aug. 5, 2016
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