Steps to getting a mortgage in California

Step One

Get a copy of your credit report. Finding your credit score and correcting any errors is a simple way of getting the best interest rate.
Get my Credit Score at http://www.equifax.com/home
Most lenders use a credit score called a FICO to rate the risk of the loan, based on your credit history with the three major credit agencies.
Generally speaking, your score will rank as follows:

Excellent credit: 730+
Good Credit: 680+
Average Credit: 600+
Poor Credit: 500+
Scores below 680 will result in a higher interest rate and may disqualify a borrower from low down payment loans.

Step Two

Know that California is a community property state, which means both spouses own half of the property regardless of who is paying for it.

Step Three

Search for a mortgage broker (individuals and agencies that arrange financing from a variety of lenders) or a lending institution such as bank, credit union, or online mortgage company. This step is key to getting the type of mortgage that will fit your needs best. We suggest asking your Real Estate Professional for advice in this matter.

Step Four

Mortgage brokers are required to be licensed in California. Ask for proof of their license. They must pass a written exam and have certain education requirements to be licensed.

Step Five

Please note that from Adjustable Rate Mortgages a lot of people who took these loans the last few years are having problems. These move some of the interest rate risk away from the lender and onto you. Basically, if interest rates rise, so will your mortgage payment. If interest rates fall, your payment will stay the same or decrease slightly. If there is a huge spike in interest rates, you could lose thousands.

Step Six

There are no predatory mortgage lending (intentionally coercing consumers into contractual loans with unusually high payment terms and interest rates, often directed at uninformed borrowers or those with poor credit) laws in California. However, the Home Ownership and Equity Protection Act of 1994 federal law applies to this and all of the United States.

Step Seven

Explore various California and federal home buyers programs offered to the disabled, senior citizens, veterans, low-income buyers, single parents, first-time buyers, senior citizens, and rural home buyers, such as the Interest Only Plus program, the 40-Year Fixed program, and the Affordable Housing Partnership Program.

Step Eight

Fill out the loan application with your selected lender, and bring all paperwork such as pay stubs, investment information, and tax returns. Pay careful attention to any fees that are mentioned

Step Nine

Acquire a reputable real estate agent to help you find your dream home.

Step Ten

Finalize the loan with your lender, and make an offer on the home.

Step Eleven

Pay all closing fees. Move in, and expect to begin paying your lender shortly.