Loans & Mortgages
Mortgage financing, demystified.
This guide explains the loan options real buyers actually use, what pre-approval means, and what lenders look for, so you walk into tours with a budget you trust. Alejandro Espitia pairs every home search with financing guidance, and connects you with trusted lenders who match your situation.
Loan types
The major mortgage programs, in plain English.
Conventional
The most common option, typically requiring stronger credit and a down payment, with flexible terms and no federal backing.
FHA
Insured by the Federal Housing Administration, FHA loans are popular with first-time buyers for lower down payment and credit requirements.
VA
For eligible veterans, service members, and some spouses: often zero down payment, competitive rates, and no private mortgage insurance.
USDA
A zero down payment option for approved rural and suburban areas; income limits apply; aimed at owner-occupants.
Jumbo
For loan amounts above conforming limits often needed in pricier Southern California markets. Expect deeper credit and reserve requirements.
Refinance
Rate-and-term or cash-out refinancing can lower payments, shorten terms, and pull equity out for improvements or investments.
Availability, rates, and terms vary by lender, program, and your qualification. Alejandro is a real estate professional, not a lender; he guides the process and connects you with lending partners, but approval always comes from the lender, and all loan terms come from them.
Pre-approval
Pre-approval is your buying power, on paper.
Pre-qualification asks what you think you earn. Pre-approval verifies it: income, assets, credit, and employment get checked, and the lender issues a formal commitment letter. That letter makes offers competitive, and tours realistic.
Pre-qualification
A quick estimate from a lender based on numbers you share. Great starting point, but not a commitment.
Pre-approval
The lender verifies your documents and issues a letter. Sellers treat it like cash, basically.
What lenders look for
The four numbers that decide your rate.
- 1
Credit score
Higher scores typically unlock better rates. Check your reports early, and correct errors before applying.
- 2
Down payment
More down usually means lower monthly costs. Programs exist for much less than the classic 20 percent.
- 3
Debt-to-income ratio
Lenders weigh your monthly debts against income. Paying down cards before applying helps.
- 4
Employment history
Two years of steady, verifiable income is the typical bar. Self-employed buyers need extra documentation, worth preparing early.
Loan-ready checklist
Gather these before the application.
- Two years of W-2s or tax returns
- Recent pay stubs, typically 30 days
- Bank and investment statements, usually 60 days
- Photo ID and Social Security number
- Gift letter templates if family funds help
- A clear statement of debts: cards, loans, child support
Common questions
Financing questions buyers ask most.
Do I need 20 percent down?
No. Many programs accept far less, especially FHA and VA loans. Down payment assistance may also be available to qualified buyers.
What is a debt-to-income ratio?
It is your monthly debts divided by your gross monthly income, expressed as a percentage. Lenders use it to gauge how much house you can carry.
Can I get pre-approved before touring homes?
Yes, and we recommend it. Knowing your verified number makes tours productive and offers competitive, especially in tight markets.
What closing costs should I expect?
Plan roughly for 2 to 5 percent of the purchase price, depending on the loan, county, and escrow items. Alejandro reviews the estimate with you line by line.
Not sure which loan fits?
Bring your income, debts, and dreams to one conversation. Alejandro will map your loan path, and pair it with the home search.