Home Loans: California
The Golden State is a hub for tech talents, creatives, and modern explorers. If you'd love to live where the action's at, District Lending can help with the most affordable home loans — California is calling.
California is a very competitive housing market: only 56% of residents own their homes, due in no small part to the fact that the state is facing a major housing shortage. It’s expected that more than 327,100 will enter the housing market in 2024, vying for only 79,643 available homes.
The shortage has increased the average house’s cost exponentially, making California the second priciest housing market in America behind Hawaii. The average property is listed for $859,800, and 47% of homes sell above the listing price.
Major cities such as Los Angeles and San Francisco can be much pricier: the typical Los Angeles home is listed for $952,000, while San Francisco houses average $1.2 million. Homes go fast throughout the state, typically selling in less than 29 days, and a single home may get five or more offers.
As homes here are so expensive, few people can afford to pay for their property upfront, which is why so many homebuyers look for a California mortgage through a broker like District Lending.
Secure a California Mortgage Loan for Your Next Property
Purchasing a home in California allows you access to a brighter future: you'll build equity, which you can leverage to assist you in the future, and you'll also enjoy the security of knowing you're protected against rent hikes. Some areas of California have seen rent hikes of up to 40% between 2020 and 2023, a trend that's not likely to go away soon, as rent control initiatives have faced fierce resistance from landlords.
If you're ready to join the ranks of homeowners who call the Golden State home, contact District Lending and get access to the best mortgage lenders. We provide competitive rates and personalized service throughout the home-buying process, as well as a variety of different programs to meet your needs.
California Home Loan Factors
Depending on your income, credit score, down payment size, and other factors, you may benefit from different home loan types. Here are the factors you need to consider when getting a California mortgage.
Types of California Home Loans
There are several different loan program options for Californians, including conventional, jumbo, and FHA or VA loans.
A conventional loan refers to a loan that’s not backed by the government but offered through private lenders. Conforming loans must be below limits set by Fannie Mae and Freddie Mac; in 2023, this is $726,200 for most of California, but it goes up to $1,089,300 in high-cost markets like San Francisco and Los Angeles.
A jumbo loan is every loan above Fannie Mae’s and Freddie Mac’s limits, determined each year. Due to their loan size, jumbo loans are riskier for the lender, so they have higher stipulations and are offered by fewer lenders.
The Federal Housing Administration offers FHA loans for low to moderate-income families who may not meet the qualification requirements for a conventional loan. They require a smaller down payment and often have more advantageous mortgage rates.
Finally, VA loans, administered by the Veterans Affairs Department, are intended for veterans, active duty service members, and surviving spouses of those killed as a result of their military service. They require no down payment or mortgage insurance and have excellent interest rates. Applicants must meet specific requirements that relate to their military service.
Regardless of your loan option, there are specific requirements that lenders will use to determine whether a buyer can qualify.
Credit Score
The average FICO score in California is 721, seven points higher than the US average, which is enough for most mortgage lenders. And as California homes are the second-most expensive in the US, the benefit of a good credit score cannot be overstated: the better your FICO score, the better interest rates you can access, and the lower your monthly payments will be.
You’ll need a credit score of at least 620 for a conventional loan program, though many lenders will want to see higher. A jumbo loan requires an even higher score, often 700 or above.
The FHA and VA loan program requirements are much lower. You can have a score as low as 500 for an FHA mortgage, though you will have to provide a higher down payment; those with scores of 580 or above need to pay 3.5%, while a buyer with a 579 or lower must pay 10% upfront.
The VA loan program typically requires a 620, but you may find lenders that will accept scores of 500.
Financial Situation
Getting any mortgage will require a relatively low debt-to-income ratio (DTI). Your debt-to-income ratio includes all other credit payments, such as car payments, student loans, and credit card purchases.
If you have less debt, you can often qualify for a lower rate and borrow more. Those with a higher DTI may choose to pursue a government-backed loan, which will accept a higher DTI percentage.
Military Service
Those who have served in the armed forces may be eligible for a VA loan, which requires no down payment and provides excellent rates. Moreover, since VA loans are government-backed, borrowers don’t need private mortgage insurance. You’ll also be eligible for homebuyer programs, like grants, to assist with closing costs.
Down Payment and Closing Costs
Most mortgages require you to provide a down payment — an upfront payment expressed as a percentage of the purchase price.
You will also need to pay for closing costs, which are typically between 3% and 6% of the overall mortgage. These costs pay for the administrative tasks associated with a real estate sale. There are numerous programs for first-time homebuyers who may need help to afford this, including forgivable loans and grants from the California Housing and Finance Administration.
Interest Rate
Homeowners can select between fixed-rate and adjustable-rate mortgages. With a fixed-rate mortgage, your mortgage rates are locked in at the beginning of the term. They are better for older buyers who want to have regular monthly payments. Adjustable rate mortgages have low interest rates at the start of the loan, and the rate will adjust after some time.
If you’re not satisfied with the interest rates available to you, you can also apply for discount points, which is where you make a higher payment upfront to lower your rate.
Benefits of Getting a Mortgage with District Lending
Both first-time homebuyers and those seeking to refinance their mortgage rely on District Lending, thanks to our fast credit approval process, excellent mortgage rates, and outstanding loan options for homebuyers of any budget.
Free Quote With No Credit Check
It’s important to check quotes from multiple lenders to get the best deal. However, some lenders may require credit approval before they’ll let you get an idea of your options.
This situation can be challenging: every inquiry can take points off your credit score. We want to avoid harming your credit, so we do not pull your credit report.
Quick Pre-approval Process
Homes go fast in California, typically selling in less than a month, so you need every advantage you can get. A pre-approval letter shows sellers that you’re serious about purchasing a home and that you can afford a mortgage.
At District Lending, you can get pre-approved in only a few hours, meaning you can get out and start looking for the perfect property immediately. Moreover, you don’t need to come to our office: you can get your mortgage pre-approved online.
Competitive Rates
Even a few percentage points can make a huge difference in how much you spend over time. District Lending works hard to provide a great mortgage rate for every homebuyer. We offer fixed-rate and adjustable-rate mortgages, and we’ll explain the advantages of each option in terms of your monthly payments and costs over the life of your loan.
A Variety of Loan Programs
District Lending has mortgage options for any budget, ensuring every California resident can afford their dream home. We have conforming, jumbo, FHA, construction, and VA loan options.
Not sure which one is right for you? Your loan officer will help you work through all your options, so you know your mortgage loan is perfect for your needs.
Personal Mortgage Loan Officer
Some mortgage lenders see their borrowers as just another number on a spreadsheet, but we recognize each borrower has a unique financial situation and goals.
When you work with District Lending, you’ll get the expert assistance of a mortgage loan officer, who will take the time to learn your needs and match you with options that meet your expectations. If you’re a first-time homebuyer, we’ll explain the entire process, such as the impact of the annual percentage rate and what fees you can expect upon close.
Most of our borrowers will work with the same loan officer throughout the life of their mortgage, including when they choose to refinance for a better rate. We’ll be there to answer all of your questions and ensure you have access to all the homebuyer programs available.
Down Payment Assistance
The upfront costs required to buy a house can be intimidating, especially for first-time home buyers, but we want to make sure that you buy your dream home. We’ll assess your situation and find you the most affordable home loan program — federal, state- or county-level — to cut your costs. We’ll name just a few of the most prominent programs below.
Access to CalHFA and Federal Housing Administration loans
We’ll help you find a first mortgage program to assist with down payments, closing fees, and foreclosure prevention resources. These include CalHFA conventional mortgages, CalHFA FHA-insured mortgages, and subordinate programs such as the My Home Assistance Program.
We’ll also connect you to consumer education programs that will help you prepare for the costs of your mortgage loan (government programs even list first-time buyer education as a requirement, including Fannie Mae’s HomeReady mortgage).
As terms differ between mortgage lenders, we’ll help you find a tailored solution for your first mortgage.
Access to USDA loans
USDA loans focus on developing rural areas and helping low-income households improve their living conditions. A USDA loan lets you finance up to 100% of your home, with loan limits varying depending on the area. Other benefits of the USDA loan include:
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Significantly lower, fixed interest rate
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Payback periods as long as 33 and even 38 years
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No down payment requirements (most of the time)
District Lending will help you find the most affordable USDA mortgage loan so your home purchase doesn’t become a burden.
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Incorporated Closing Costs
Closing costs are payments to the professionals who complete the closing process, including lawyers, realtors, and registrars; they are usually between 3% and 6% of the purchase price. As we know this can be difficult for buyers to manage, we can incorporate these costs into your mortgage so that you pay them over time rather than upfront.
We can also help you find mortgages without closing costs.
Refinance Assistance
Want to take advantage of lower mortgage rates? We can help you get a lower rate when you refinance, ensuring you have lower monthly payments and extra cash for necessary repairs.
Refinancing lets you exchange your first mortgage for one with a more advantageous interest rate, allowing you to save money over time. We’ll walk you through your options, including switching to a different interest rate scheme. If you didn’t use us to open your original loan, that’s okay: we’ll be happy to help you refinance even if you worked with someone else.
You can sign up for our notification program so you’re the first one to know when interest rates drop, letting you get the best options possible.
Free Mortgage Calculators
Borrowers want to know what to expect from their monthly payments, so we developed a free calculator that lets you explore the different variables that make up your loan.
Check out how much your mortgage rate will impact your costs, consider what you’ll pay based on how much money you put down, and weigh the pros and costs of fixed-rate versus adjustable-rate mortgages.
Our calculators also work if you need help determining what price range you’re looking for: put in the monthly payment you can afford, and you’ll get an estimate of what types of homes you should focus on when you’re ready to go house hunting.
When you’re ready, you can get in touch with a member of our team with all the facts you need to make a great decision.
Choose District Lending for Your California Home Loan
District Lending is one of the premier mortgage brokers in the Golden State; we’ve helped thousands of borrowers purchase their dream homes regardless of their financial situation. We’re here for you throughout the life of your loan, including when you choose to refinance or open a home equity line.
Contact us today to learn more about our California mortgage programs. We’re here for you 24/7 through our online portal, where you can use our mortgage calculator, get a free quote with no credit check, and finally, get pre-approved.
Cities We Service In California
We provide home loan services to people all over California, including in the following cities:
- Tucson
- Phoenix
- Tucson
- Scottsdale
- Scottsdale
- Sedona
- Sedona
- San Francisco
- Los Angeles
- San Diego
- San Jose
- Sacramento
- Fresno
- Oakland
- Long Beach
- Bakersfield
- Anaheim
- Stockton
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