Conventional Mortgage Loan in Southern California

• The minimum credit score required for a conventional loan is 620.

• The debt to income ratio (DTI) is between 36-45% and in some cases higher with compensating factors such as reserves, low loan to value (LTV), and excellent credit. 

• Down payment of 3% to 20% based on the purchase price. If the down payment is less than 20% you will be required to make monthly private mortgage insurance (PMI) payments until you have 20% equity. The down payment required is based on whether you are a first-time homebuyer, plan to rent it out, interest rate is fixed or adjustable, single family or multi-unit property and how your income compares to the median income in your area.

• Proof of income such as 2 recent paystubs, W2s or tax returns.

• Verification of employment (VOE) to ensure you are gainfully employed or if self-employed you will need to provide 1099 to prove steady income.

• You will be asked to show proof of assets such as the last 2 months of bank statements, or statements from any investment accounts.

• Proof of identity such as a drivers license, identification card or social security card.

• Credit reports will be used to review payment history, number of accounts, monthly debt obligations, and any past financial issues such as delinquency, child support, or bankruptcy.

• Appraisal is required by a licensed appraiser to show the property’s current market value and is sufficient collateral for the loan being issued.

• Can be used for a second home or investment property.