Back to the Learning Center

Applying for a Mortgage - Home Loans in California

Step One - Research Your Available Options

Start the discovery process, research and get a general idea of what ballpark amount your home mortgage loan is in. Consider these questions to get an estimate of what you can afford:

What will my mortgage payment be?

It is important to find the right home and mortgage loan to match your budget. Use our mortgage calculators to figure out your estimated mortgage monthly payment in advance by estimating your home loan amount, interest rate, and length of mortgage.

How much home can you afford?

Find out what type of home is in your budget by entering a few numbers into our mortgage calculator. Our mortgage calculator is based on standard affordability ratios used to determine qualification for home mortgage approvals. The housing payment ratio (or front ratio) compares your total mortgage payment to your monthly income and your total debt ratio (or back ratio) compares your total monthly obligations including your mortgage payment to your monthly income.

Step Two - Get Pre-Qualified for a Home Loan

Set up an appointment to speak with one of our expert and friendly loan officers. We can help you figure out what kind of house you can afford. This is a great time to see what type of California home loan would work best for you.

Step Three - Complete Mortgage Application

Provide information on your personal financial situation when you complete the California mortgage application. Sign a release allowing us to run a credit check to allow us a better picture of the different types of California home loan programs we may be able to offer you.

Step Four - Get Pre-Approved for a Home Loan

Your information will be confirmed, and your credit report will be checked. Subject to appraisal, the mortgage loan is approved. Being pre-approved will speed things up for when you find your home.

What Happens If My Loan Is Denied

Lenders are required by a federal law, The Equal Credit Opportunity Act, to tell you in writing when you've been turned down for credit.

Two important pieces of information must be included in the letter you receive when you are denied credit: The specific reasons why you were denied credit (or information on how to obtain those reasons); and If a credit report was used in making that decision, the name and address of the credit reporting agency that supplied it.

If you don't understand the reasons given for turning down your application, ask for more information. Sometimes it can be hard to determine exactly why your application was not approved, because these decisions involve a lot of different factors. Don't be shy about asking, though, since the information you receive may help you improve your credit so you can qualify in the future.

You may be denied credit for various reasons, including not meeting the creditor's minimum income requirement or not being at your address or job for the required amount of time.
If your loan application was rejected because of insufficient income to afford the house you want or you have insufficient funds for closing costs and a down payment, you could consider loan programs for low to moderate income borrowers with lower down payment requirements, such as an FHA loan or VA loan.

If you requested the loan amount which is larger than 95 percent of the appraised property value, the chances are that loan will be denied.

In this situation:

• You can try to renegotiate with the seller for the purchase price to lower the loan amount
• Make an additional down payment to cover the difference between the appraised value and purchase price
• If you think the appraiser undervalued the property suggest that the lender reexamine the appraisal
• If your loan is turned down because of a poor credit report, you are entitled to a free copy of that report. You must request it within 60 days, so don't wait to order it. Read your report carefully to make sure it is accurate and complete. Once you have a copy of your credit report, you should check for errors and fix any errors by disputing them with the credit report agency. If you believe that mistakes on your report led to the rejection of your application, you can ask the credit bureau to send a corrected copy to the lender. Follow up with the lender to find out if your application can be reevaluated.
• Finally, you can try again. All lenders have different approval standards. Just because you did not get a loan from one financial institution doesn't mean you can't get one somewhere else. Try again with another company. Just don't apply for more than four or five loans in a six-month period.
  When you are ready to shop for a loan, you can work directly with a lender or with a mortgage broker representing many individual lenders. Direct lenders are lending their own money, have in house programs and make the final decision on your application. Mortgage brokers are intermediaries who represent many lenders and loan programs from which to choose.