Quick Answer

    What are the most common mortgage questions in California?

    California homebuyers frequently ask about minimum credit scores (580 for FHA, 620 for conventional), down payment requirements (0–20%), current interest rates, how to get pre-approved, and the differences between fixed-rate and adjustable-rate mortgages. Cascada Mortgage Advisors, Inc. answers all of these and more.

    — Cascada Mortgage Advisors, Inc.

    Frequently Asked Questions

    Get answers to common questions about mortgages, home loans, and the financing process in California

    •What credit score do I need to qualify for a mortgage in California?

    Credit score requirements vary by loan program. For conventional loans in San Diego and California, you typically need a minimum credit score of 620. FHA loans may accept scores as low as 580 with a 3.5% down payment, or 500 with 10% down. VA loans often accept scores around 620, though some lenders may work with lower scores. Our mortgage advisors can help you understand which California home loan programs you qualify for based on your credit profile.

    •How much down payment do I need for a home in San Diego?

    Down payment requirements depend on the loan type. Conventional loans typically require 3-20% down, FHA loans require as little as 3.5%, VA loans offer 0% down for eligible veterans and active military, and jumbo loans for high-value San Diego properties usually require 10-20%. As a California mortgage broker with access to 100+ lenders, we can help you find the best down payment options for your home purchase.

    •What is the mortgage pre-approval process and how long does it take?

    The mortgage pre-approval process involves reviewing your credit, income, assets, and employment history. At Cascada Mortgage Advisors, Inc., we typically provide pre-approval letters within 24-48 hours. Getting pre-approved for a California home loan strengthens your offer when buying a home in San Diego's competitive real estate market. Our streamlined process includes document collection, credit check, and income verification to give you an accurate borrowing amount.

    •Should I refinance my California mortgage now?

    Refinancing may make sense if current mortgage rates are lower than your existing rate, you want to shorten your loan term, or you need to tap into your home equity through a cash-out refinance. As San Diego mortgage experts, we can analyze your current loan, compare it with today's rates, and calculate potential savings. Factors to consider include closing costs, how long you plan to stay in your home, and your financial goals.

    •What documents do I need to apply for a home loan?

    Standard mortgage application documents include: 2 years of tax returns, 30 days of recent pay stubs, 2 months of bank statements, proof of employment, government-issued ID, and information about your current debts. For self-employed borrowers in California, we offer Non-QM loan programs that may have alternative documentation requirements. Our mortgage advisors will provide a complete checklist tailored to your specific loan program.

    •How do FHA, VA, and conventional loans differ?

    FHA loans are government-backed mortgages ideal for first-time homebuyers with lower down payments (3.5%) and more flexible credit requirements. VA loans offer 0% down payment options exclusively for veterans, active military, and eligible spouses with no mortgage insurance required. Conventional loans are not government-backed, typically require higher credit scores (620+) and down payments, but offer more flexibility in property types and loan amounts. Our California mortgage brokers can compare all options to find the best fit for your situation.

    •What are closing costs and how much should I expect to pay?

    Closing costs for California mortgages typically range from 2-5% of the loan amount. These include lender fees, title insurance, appraisal fees, escrow fees, and recording fees. For a $500,000 San Diego home purchase, expect $10,000-$25,000 in closing costs. Some costs can be negotiated or rolled into your loan. As your mortgage advisor, we provide detailed closing cost estimates upfront and can help you explore options to reduce out-of-pocket expenses.

    •Can I get a mortgage if I'm self-employed?

    Yes! Self-employed borrowers in California can qualify for mortgages through various programs. Traditional loans typically require 2 years of tax returns and business documentation. We also offer Non-QM (Non-Qualified Mortgage) loans designed specifically for self-employed individuals, business owners, and those with unique income situations. These alternative financing options may use bank statements or other methods to verify income, making it easier for San Diego entrepreneurs and freelancers to secure home financing.

    •What is a jumbo loan and when do I need one in California?

    A jumbo loan is a mortgage that exceeds the conforming loan limits set by Fannie Mae and Freddie Mac. In most California counties, including San Diego, the 2026 conforming loan limit is $1,104,000. Jumbo loans are common in California's high-cost real estate markets. They typically require higher credit scores (700+), larger down payments (10-20%), and more documentation. Our access to 100+ lenders helps us find competitive jumbo loan rates for luxury homes and high-value properties.

    •How does a reverse mortgage work for California seniors?

    A reverse mortgage allows California homeowners age 62 and older to convert home equity into tax-free income without monthly mortgage payments. You retain home ownership and can receive funds as a lump sum, monthly payments, or line of credit. The loan is repaid when you sell the home, move out permanently, or pass away. Reverse mortgages can be an excellent retirement planning tool for San Diego seniors looking to supplement income while aging in place. We specialize in helping California retirees understand their options.

    •What is an impound (escrow) account and is it required in California?

    An impound account collects monthly portions of your property taxes and homeowners insurance with your mortgage payment, then pays those bills on your behalf. In California, lenders typically require impounds when your down payment is less than 10% (or 20% for non-conforming loans). Impounds are mandatory on all FHA loans regardless of down payment. Waiving impounds with 20%+ down usually costs 0.125–0.250% in lender credit or rate adjustment.

    •What is the difference between a rate lock and a float-down option?

    A rate lock guarantees your interest rate for a set period (typically 15, 30, 45, or 60 days) while your loan closes. A float-down option, available on some programs for an additional fee, lets you capture a lower rate if market rates drop after you've locked. In San Diego's volatile rate environment, a 45-day lock with a one-time float-down can protect you from rising rates while preserving upside if rates fall.

    •How do discount points work and when do they make sense?

    Each discount point costs 1% of your loan amount and typically lowers your interest rate by 0.25%. On a $700,000 California loan, one point costs $7,000 and might reduce your monthly payment by about $100–$120. The break-even is usually 5–7 years, so points make sense only if you plan to keep the loan that long. Many California buyers in 2026 are using seller-paid points instead of price reductions because the long-term savings exceed the upfront cost.

    •What is CalHFA and can it be combined with FHA or conventional loans?

    CalHFA (California Housing Finance Agency) offers down payment and closing cost assistance programs like MyHome Assistance and the Dream For All shared-appreciation loan. CalHFA assistance layers on top of an FHA, VA, or conventional first mortgage and can cover up to 3.5% of the purchase price. Eligibility requires income limits (varies by county — roughly $235K in San Diego in 2026), completion of homebuyer education, and a first-time-buyer status (no ownership in the past 3 years).

    •How long is title insurance valid and who pays for it in California?

    Lender's title insurance is valid for the life of your loan; owner's title insurance is valid as long as you or your heirs own the home. In Southern California, the buyer traditionally pays for the lender's policy and the seller pays for the owner's policy, though this is negotiable. Following the 2025 ALTA policy updates, expect to see lower premiums and clearer coverage for forged-deed and wire fraud claims.

    •What is the 2026 conforming loan limit in San Diego County?

    For 2026, the FHFA set the high-balance conforming loan limit at $1,104,000 for one-unit properties in San Diego County. Loans up to this amount qualify for Fannie Mae and Freddie Mac pricing. Loans above $1,104,000 are classified as jumbo. The 2026 FHA limit in San Diego County matches the conforming ceiling at $1,104,000, and the VA loan limit is uncapped for veterans with full entitlement.

    •Can I use gift funds for my down payment in California?

    Yes. FHA, VA, USDA, and conventional loans all allow gift funds from a relative, employer, or qualifying organization for the down payment and closing costs. The donor must provide a signed gift letter stating the funds are not a loan, and the lender will document the transfer via bank statements. On a conventional loan with less than 20% down, the borrower must contribute at least 3% of their own funds; on an FHA loan, the entire 3.5% can be gifted.