Southern California Mortgage Loans

Written by Stephanie Dula
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Southern California mortgage loans come in all forms for those who wish to buy real estate in this area. Whether the loan money will be used for a newly built home, a commercial property, or a vacant lot on which to build, the possibilities of lender programs seem endless. Mortgage companies typically rely on an automated system of factors developed by the Fannie Mae Foundation to help them understand the risk that may be involved in each borrower's situation.

Major Considerations of Lenders

Three of these factors are generally understood to be the most important when considering a borrower's ability to handle the responsibility of a loan. These are the amount of equity he or she may already have in a property, savings and other reserves, and of course, credit history. Since lenders typically do not want to have to go through repossession and foreclosure of a property, they tend to prefer borrowers who seem less likely to default on a payment.

When shopping around for a mortgage loan in southern California, it's important that the borrower be aware of the three aforementioned aspects of his or her financial profile. Obtaining a credit report and taking any necessary steps to repair it will be the first step. Additionally, putting a cap on spending, paying down credit cards, and not taking on any new debt will help one get prepared for the process of applying for a loan.

There are other factors that certainly play into a lender's final decision when it comes to loan approval. Employment status, type and length of loan, and any prior history of defaulting on payments will all be seriously examined by lenders. The system is set up so that an overall picture will be created, and one or two weak areas may not automatically result in denial. A complete list of factors can be obtained from several online real estate databases.


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