Home Loans In Los Angeles, California

The city of Los Angeles requires no lengthy introduction. The vibrant scenery, exciting nightlife, booming economy, great weather, fabulous attractions — these are just some of the many reasons why so many people want to call the ‘City of Angels’ home. 

If you’re looking to buy a home in Los Angeles, you’ll likely need a home loan to seal the deal. At Capital Home Mortgage, we provide a variety of home loan programs, including Jumbo loans, ideal for financing homes for sale in a city like Los Angeles. 

How To Qualify For A Home Loan In Los Angeles

Knowing how to qualify for a Los Angeles mortgage loan is an essential aspect of the home buying process. It will help narrow your choices so you can quickly find the right home loan program for your needs.

The qualification criteria for home loans vary depending on the type of program that you want. However, there are some minimum requirements that you’ll need to meet before talking to a lender. These include: 

• Down Payment

Most mortgage products require a down payment. The actual percentage varies from one type of loan to the other. FHA home loans require 3.5%; conventional loans require 3 – 5% downpayment. Jumbo home loans need a 10% to 20% down payment. Other loans require nothing.

Every borrower must provide their last two months’ bank statements to show where their source of funds to close on the loan is coming from.

• Credit Score 

If you want to apply for a home loan in Los Angeles, you need a decent credit score. Lenders expect a credit score of 620, though it might need to be higher for certain types of loans. Equifax, a leading credit bureau, says that a good credit score for a mortgage starts at 670. The rule of thumb is the higher the credit score, the more creditworthy you will appear to lenders. 

• Debt-to-income (DTI) Ratio

There are two types of DTI ratios, front-end and back-end. The front-end ratio relates your income relative to the proposed housing expense. This is called the monthly PITI (Principal Interest, Taxes, Insurance, etc.) or your proposed monthly housing expense. It should be no more than 36% of your gross income.

The back-end ratio combines all your current monthly payments and debts plus the proposed monthly housing expense PITI). The rule of thumb is that your DTI ratio should be 45%. Different home loan programs have other DTI ratio guidelines; some like FHA may go 50 – 55% with compensating factors. 

Some loans may require this percentage to be lower, around 35% to 40%. Then again, some lenders may be willing to accept a DTI of up to 50%, provided you’re able to meet other stringent conditions. 

• Income And Employment

These are important because they demonstrate your ability to repay the loan. When approaching a lender about Los Angeles mortgages, you’ll need to provide the standard documents such as your most recent 30-day paycheck stubs and your last two years’ W2s. For self-employed or 1099 employees, you will need your previous two years’ tax returns and a current profit and loss statement. 

Los Angeles, CA Mortgage Lender

If you’re looking for a reliable mortgage lender in Los Angeles, look no further — Capital Home Mortgage is here for you. 

We understand that buying a home can be a stressful experience, especially if this is your first time. With Capital Home Mortgage in your corner, you can expect a more streamlined loan process from start to finish. 

We are a direct mortgage lender, which means we can offer flexible underwriting policies suited to fit any borrower, as well as on-time closing, low fees, and competitive interest rates. 

Ready To Apply For A Home Loan In Los Angeles?

Whether you’re a first-time borrower or an experienced real estate investor, the Capital House Mortgage team can help you realize your dream of homeownership in Los Angeles. Give us a call now at (323) 767-8899 to discuss your mortgage options with our experienced loan officers. 

We look forward to providing your next Los Angeles home loan.