Frequently Asked Questions

Minimum: 3.5% for FHA loans (first-time buyers)

Conventional: 5-20% typical

Best: 20% to avoid mortgage insurance (PMI)

Less than 20% down requires PMI, which increases your monthly payment by 0.5-1.5% of the loan amount.

FHA Loans: 620+ minimum (580 with 10% down)

Conventional: 620+, but 740+ gets best rates

Best Rates: 800+ score = savings of $50-200/month

Check your credit now at annualcreditreport.com (free).

Typical Timeline: 30-45 days from offer to closing

Bottlenecks: Appraisal (7-10 days), underwriting (10-15 days), title search (5-10 days)

Fast-track: Can close in 21 days with pre-approval and inspection contingency removal

Average: 2-5% of home purchase price

Includes: Loan origination fees, appraisal, title insurance, escrow, recording fees

Example: $500K home = $10K-25K in closing costs

You can negotiate for seller to cover some costs in multiple-offer situations.

Yes, absolutely. Inspection costs $400-800 but can save $10K-50K on unexpected repairs.

What inspectors check: Foundation, roof, HVAC, plumbing, electrical, pest damage

Red flags: Foundation cracks, roof leaks, plumbing issues, termite damage

If major issues found, you can negotiate repairs or price reduction.

National Average: 5-8%

California Markets:

• Bay Area: 2-4% (expensive market)
• Southern California: 3-5%
• Inland Empire: 5-7%

Rule: Properties below 1% monthly rent-to-price ratio rarely cash flow.

Target: $500-1000/month in positive cash flow after all expenses

Expenses to budget: Property tax (1% annually), insurance ($100-300/mo), maintenance (1% rule), vacancy (5%), management (8-12% if hired)

Example: $4000/month rent with $1000 expenses = $3000 gross income

After mortgage ($2500), you might have $500/month cash flow (or negative if rent too low)

Short answer: Yes, but depends on your market and timeline

Market rates (2026): Mortgage rates 6.0-7.0%, cap rates 4-7%

Best markets for cash flow: Inland Empire (Riverside, Victorville, Rancho)

Best for appreciation: Southern California (3-5% annual growth)

Use our investment calculator to analyze specific deals.

Possible but difficult. Lenders typically require:

620+ credit score (higher than primary residence)

25%+ down payment

Strong income documentation

Professional lenders or private money might work if credit is very bad.

Good news: Most sellers owe ZERO in capital gains tax

Exclusion: $250K (single), $500K (married couple) is tax-free

Example: You bought for $400K, sell for $600K = $200K gain. Married? No taxes owed!

If gain exceeds exclusion: Excess is taxed at capital gains rates (15-20% federal + CA state)

Ownership test: Own & live in home 2 of last 5 years to qualify for capital gains exclusion

Break-even: 5-7 years typically (selling costs + appreciation)

If selling sooner: You may owe capital gains tax on the gain

Standard: 5-6% split between buyer & seller agents

Yes, negotiable: Some agents accept 4.5-5% depending on market conditions

Discount caveat: Lower commission might mean less marketing effort

Saving calculation: 1% savings on $500K home = $5000 in your pocket

What it does: Lets you swap investment properties and defer ALL capital gains taxes indefinitely

Rules:

• Identify replacement property within 45 days
• Close on replacement within 180 days
• Replacement must be equal or greater value
• Only for investment properties (not primary residence)

Benefit: Build massive portfolios without paying capital gains tax

Current (March 2026):

30-year fixed: ~6.45% | 15-year fixed: ~5.89% | FHA: ~6.12%

Updated daily: Check our rates page for latest

Your rate depends on: Credit score, down payment, debt-to-income ratio

Honest answer: Nobody can predict with certainty

Factors that affect rates: Fed interest rates, inflation, economic conditions, bond market

Current outlook: Expect 6.0-7.0% range in 2026

If you're concerned: Lock your rate TODAY. Don't wait and hope.

Depends on your goal:

• Tech worker? Bay Area (SF, San Jose, Oakland)
• Lifestyle/beach? Southern California (SD, LA, OC)
• Investment/cash flow? Inland Empire (Riverside, Rancho, Victorville)
• Best appreciation? Inland Empire (4-6% annual)

Read our market comparison guide for detailed analysis.

Recommend agent: Worth the 2.5-3% commission for buyer representation

Agent benefits: Market knowledge, negotiation, access to MLS, legal guidance

Potential savings: A good agent can negotiate $10K-50K in your favor

We can refer you to a trusted agent if interested.

Highly recommended in California. Attorneys review contracts, title, and protect your interests.

Cost: $800-2000 depending on complexity

Worth it for: Investment properties, complex situations, contingency issues

Usually not needed for: Simple primary residence purchases (agent handles most)

Step 1: Read our first-time buyer guide

Step 2: Calculate your affordability using our calculators

Step 3: Get pre-approved for a mortgage (free)

Step 4: Schedule a free consultation with an expert