Home Loans Southern California

The challenge of purchasing a new home can be a very stressful task, that for a second you will consider about just go with the first place in your price range and continue to stay on rent. But to help you come out of that situation and enlighten the process and just get the most out of the mortgage. Since there is a hasty escalation in the property market in California, home loans are becoming a necessity. 

A home loan in California is basically for the purchase of a primary or investment residence. In the home loan, the mortgagee basically lend the money to the borrower in exchange the borrower will transfer the title to the mortgagee on the condition that the title will be transferred back to the owner once the payment has been made and other terms have been fulfilled. 

It is the one of the most common forms of mortgage in California, and it also comes with lower interest rates than almost any kind of mortgage an individual can find. It allows a chance to purchase real estate property to a vast group of citizens in California who do not have enough finances or who cannot provide such large amount of money at once. These types of loans have a flexible or fixed interest rate the needs to be paid monthly along with a endowment to the principal amount of the mortgage.

Are you eligible for a home loan?

Certain aspects need to be considered in order to prove your eligibility for a home loan in California. If you are a first time home buyer you need to maintain all the documentations accordingly so you are prepared for anything that comes along.

Credit Score

Credit Score is one of the important factor that needs to considered while qualifying for a home loan in California. A good credit score will improve your chances of qualifying for the home loan. Every lender has different standards for the credit score. Having a low credit score does not necessarily mean that you are not qualified for the loan. Credit score is based on the credit history of an individual and evaluates an individual’s ability. A mortgage lender usually considers these scores in order to evaluate an individual’s ability to repay the home loan. By maintaining a long history of paying the bills on time and keeping the debt low, can help you posses high credit score. 

Debt to Income Ratio

It is a measure that is used to compare an individual’s debt payment and their overall income. It is one way the mortgage lenders measures a person’s ability to manage the monthly payments and how they will be able to repay the debts. Debt to income Ratio is calculated by dividing total monthly payment by gross monthly income, it is represented in terms of percentage. Individual who have lower Debt to Income ratio are more likely to manage the debt successfully as they have a good balance between debt and income. On the contrary, a high Debt to Income Ratio indicates that a person has too much debt as compared to the income that an individual earn.