CHICO · PARADISE · OROVILLE · BUTTE COUNTY
Compare loan types, mortgage insurance, Annual Percentage Rate, points, and rate locks.
There are many types of loans available to buy a home, each with its own pros and cons. The right fit depends on your financial situation, your goals, and even the home you’d like to buy. We can help you compare the options and choose the most appropriate loan for your needs.
Compare offers using the same loan amount, loan type, term, and rate-lock period where possible. Review lender charges, points, credits, and cash to close, not just the advertised rate.
Use the CFPB guide to comparing Loan Estimates →
Down payment assistance may reduce upfront cash, but eligibility and repayment terms matter. Some assistance must be repaid when you sell, refinance, or stop occupying the home.
Mortgage insurance protects the lender if you don’t repay the loan. It can make financing available with a smaller down payment. Conventional private mortgage insurance, or PMI, and FHA mortgage insurance have different costs and removal rules.
APR stands for Annual Percentage Rate. Your interest rate determines the interest charged on your mortgage balance. APR expresses a broader cost of borrowing as an annual percentage because it includes the interest rate and certain loan charges, such as discount points and some lender fees. That is why APR is often higher than the interest rate. It does not include every expense, such as property taxes and homeowners insurance.
Discount points are an upfront charge paid in exchange for a lower interest rate. One point equals 1% of your loan amount, but the rate reduction varies. Whether paying points makes sense depends on the upfront cost, monthly savings, and how long you expect to keep the loan.
A rate lock holds an interest rate for an agreed period, subject to its terms. Your loan generally needs to close within that period. A preapproval letter alone does not mean your rate is locked.
A Loan Estimate is a standardized form showing proposed loan terms, estimated payments, and estimated costs. It helps you compare mortgage offers using the same format. Some figures may change as the loan moves toward closing.
No. Many mortgage programs are available to repeat buyers. Some low-down-payment and assistance programs require first-time buyer status, often defined as not having owned a primary residence during the previous three years. Definitions and exceptions vary by program.
Compare the monthly payment and cash needed at closing, then look closely at what creates those numbers. Interest rates, points, lender fees, and loan terms all matter. Compare Loan Estimates using consistent assumptions and distinguish lender charges from estimated taxes, insurance, and other third-party costs.
Also consider your flexibility if rates fall. Some loans offer streamlined refinance paths for eligible borrowers, while others may involve different requirements or costs. Review any prepayment penalties and whether down payment assistance would need to be repaid or approved to remain in place. Future refinancing depends on eligibility and market conditions, so the original loan should make sense on its own.
BASIC PREPARATION
Mortgage reviews usually focus on four areas. Guidelines vary by loan program, and an unusual detail does not automatically prevent approval.
Lenders generally review the most recent two years of income and employment history. You do not have to work for the same employer for two years, and a gap does not automatically disqualify you. Buyers may still qualify after starting work following school, a family or health-related break, or another explainable transition. Current, stable, documentable qualifying income is what matters.
Some popular programs may accept credit scores starting around 580. You do not need an 800 score to explore approval. Certain programs do not set a universal minimum score. If you have little or no traditional credit history, alternative credit such as documented rent, utility, or insurance payments may provide another path in eligible programs.
Down payment and closing funds must come from an acceptable, documented source. Common sources include your own funds and eligible gifts from family. Down payment assistance can sometimes cover the required down payment and eligible closing costs, creating qualified scenarios with little or no money out of pocket. Buyers may still need funds for items such as an earnest-money deposit, inspection, appraisal, or reserves.
The home must qualify along with the borrower. It generally needs to meet the applicable program's health, safety, condition, value, and occupancy standards. If repairs prevent ordinary financing, a renovation loan may let an eligible buyer finance the purchase and qualifying improvements together.
COMMON LOAN TYPES
These are starting points, not approval standards. Lenders may apply additional requirements, and the property itself must also qualify. Down payment figures shown are potential program minimums for qualifying borrowers, not an offer of credit or a promise of eligibility.
A broad option for primary homes, second homes, and investment properties.
A government-insured option with flexible credit and down payment guidelines.
A benefit for eligible service members, veterans, and certain surviving spouses.
Eligible households may have a no-down-payment option when buying in qualifying rural or suburban areas.
Financing above the conforming loan limit for higher-priced homes.