If you are one of the home buying consumers who are to purchase a Chula Vista real estate, it is beneficial to get familiarized with the city's financing basics. One of the financing basics you should know first is to identify the available loan financing options. It is a fact that not everyone who applies for a mortgage will get a pre-approval. You have to learn what it takes to get pre-approved for a home loan to purchase Chula Vista homes for sale and avoid a rejection.

Pre-approval is a formal process where a lender examines your finances and agrees in advance to loan you money up to a specified amount. This process expedites the home buying process. Obtaining a pre-approval in Chula Vista is the same process as achieving a pre-approval for a mortgage anywhere in the US. So before you decide to avail which pre-approval financing options are for you, it's important to do your homework and determine whether such a move is the right one for you.

Large Downpayment. Having enough savings before you start shopping for a home will ensure you're not paying more than you should for your home. It may not be possible for some to pay a house in full, but if you can make a large down payment, lenders may be more lenient with their qualifying ratios. For example, a person with a 20 percent down payment may be qualified with the 33 percent housing expense ratio, while someone with a 5 percent down payment is held to the stricter 28 percent ratio.

If you were not able to qualify for a conventional loan, the US government still have loan programs to promote home ownership. These loan programs have lower qualifying ratios than conventional loans, and often require smaller or no down payments.

One of the government loans available is the VA (Department of Veteran Affairs) Loan which is intended for our Veterans and Active Duty Personnel. The loan limit for Chula Vista is $537,500 but it can be available up to $1,000,000 in many San Francisco Bay Area counties. A $500K Chula Vista Home for Sale, for instance, would only require $15,625 downpayment (3.13%). There are also VA Jumbo Loans up to $1.5M in the state of California, with the appropriate amount of downpayment or equity. VA Loans require no Mortgage Insurance but they do require a financed VAFF (VA Funding Fee).

Another common government loan available is the FHA (Federal Housing Administration) Home Loan. These loans require just 3.5% downpayment while Jumbo Loans can go up to $697,500 (aka FHA High Balance). The Chula Vista FHA Loan Limit is $697,500 and it does not have to include the UFMIP (FHA's Upfront Mortgage Insurance Premium, which is usually financed into your loan amount). There may be down payment grants that you can qualify for which will greatly reduce your down payment. If not, FHA still offers the 3.5% down payment option.

It is highly recommended that you contact your local loan officer as they can determine when you will qualify for any financing. They also have knowledge of multiple loan products and lenders, and they can help you find a mortgage that suits your needs. Once you choose your lender, request a formal pre-approval letter and you'll be ready to browse the Chula Vista MLS and start shopping.