California’s mortgage application process can seem like a daunting procedure, mainly due to the regular fluctuations in the financial and property markets. This whole process can be made less daunting if the applicant makes the effort to ensure they are fully aware of the basic terminology, practices and state specifications associated with obtaining a
California mortgage. In most cases an initial payment against the property is required (a down payment), usually in the region of 20% of the total property cost.
In recent years this has become a lot to ask of potential buyers, even those with good income and high credit score, purely because of the dramatic rise in property prices and this being greatly ahead of the rate of inflation (and therefore rises in income). Bearing this in mind, many lenders have come up with the solution of creating a loan whereby no money is required upfront, giving the borrower the ability to take on the mortgage. There are different terms available to those looking for a mortgage, including loans spanning fifteen years, twenty, thirty and even forty years.
Lower interest rates can be assured by combining the correct term or length of the repayment, size of down payment (if any) and type of loan. A fixed rate mortgage allows the borrower to fix the interest rate of their loan when it is at the lower end of the scale, thus drastically reducing their repayment over the mortgage term where an interest rate rises. These interest rates have a lot of influencing factors and are usually specific to the applicant since they take in to account an individual’s credit rating, the size of the down payment made, the total amount of the loan required and the lender’s own specific policies.
Those considered prime borrowers, i.e. people with good credit ratings, are often offered the most competitive interest rates. These people are the most likely to qualify for a loan which involves no down payment against a property and can sometimes even obtain a no documentation loan (also known as a stated income loan). There is a broad range of mortgages available to anyone in the state of California looking for long-term loans against a property, even those with bad credit rating. In fact there are several lenders who specialize in offering loans and mortgages to those people with poor credit scores.
