Why choose a Conventional Mortgage?

A conventional mortgage is a widely used loan type for purchasing or refinancing single-family homes, condos, and multi-unit properties. Banc of California offers conventional loans with a variety of term options and underwriting standards aimed at helping qualified borrowers get the right mortgage at a transparent cost.

• Predictable payments: Available in fixed-rate terms, conventional mortgages give you predictable principal and interest payments over the life of the loan.
• Flexible down payments: Options that suit different budgets, including lower down payment programs for eligible borrowers.
• Competitive closing: Efficient processing and clear communication to help you close on time.
• Homeownership investment: Conventional loans often provide a straightforward path to building equity and long-term wealth.

Key Features

Banc of California’s conventional mortgage product includes features designed to accommodate a wide range of financial situations:

• Term lengths: Common fixed-rate terms such as 15-year and 30-year, as well as select adjustable-rate mortgage (ARM) options for borrowers who prefer lower initial rates.
• Conforming loan limits: Loans that meet or are structured according to prevailing conforming guidelines for straightforward underwriting when applicable.
• Down payment flexibility: From traditional 20% down to lower down payment programs that may require mortgage insurance when under 20%.
• No government insurance: Conventional loans are not insured by government agencies, which can translate to different underwriting and pricing structures compared to FHA, VA, or USDA loans.
• Refinancing options: Rate-and-term or cash-out refinancing available for qualified homeowners seeking lower payments, different amortization, or access to equity.

Eligibility and Underwriting

Eligibility is based on a combination of factors that demonstrate your ability and intent to repay the loan:

• Credit history: A consistent track record of on-time payments and responsible credit use improves approval odds and pricing.
• Debt-to-income ratio (DTI): Lenders evaluate your monthly obligations relative to income to confirm sustainable payment capacity.
• Stable income and employment: Verification of steady income and employment history helps support loan approval.
• Property type and occupancy: Primary residences generally receive more favorable terms; second homes and investment properties have specific underwriting criteria.
• Asset documentation: Savings, investments, and reserves may be required to demonstrate down payment source and financial stability.

How the Process Works

1. Pre-qualification: Provide basic financial information to estimate borrowing capacity and loan options.
2. Application: Submit a full application with the required documentation for formal underwriting.
3. Underwriting and appraisal: Banc of California reviews income, credit, assets, and the property appraisal to determine final terms.
4. Clear to close: Once underwriting conditions are satisfied, you'll receive a closing disclosure with final costs and terms.
5. Closing: Sign loan documents, fund the transaction, and take ownership of your property.

Documents Typically Required

To prepare for a conventional mortgage application, gather commonly requested documentation:

• Recent pay stubs and W-2 forms or 1099s
• Federal tax returns for self-employed borrowers
• Bank statements and asset documentation
• Proof of identity
• Purchase agreement (for home purchases) or current mortgage statement (for refinances)

Tips to Improve Approval and Pricing

• Maintain steady employment and income before applying.
• Pay down high-interest debts to improve your DTI ratio.
• Review your credit report and address errors in advance.
• Save for a larger down payment to reduce or eliminate mortgage insurance.
• Provide clear documentation for income and assets to accelerate underwriting.

Frequently Asked Questions

Can I refinance later? Yes. Homeowners can pursue rate-and-term or cash-out refinance options to adjust their mortgage based on goals and market conditions.

Is mortgage insurance always required? Mortgage insurance is typically required for conventional loans when the down payment is less than 20% or when the loan-to-value ratio exceeds certain thresholds; options to cancel insurance may be available once sufficient equity is reached.

Which is better: fixed or adjustable? Fixed-rate loans provide payment stability for long-term planning; adjustable-rate mortgages can offer lower initial rates but carry variability over time. Your choice depends on your financial goals and timeline.