Choosing the Right Mortgage: A Clear Guide to Today’s Loan Options

Understanding your mortgage options is an important step in the path to home ownership. Whether you’re purchasing your first home, buying a vacation property, refinancing, or investing in real estate, there is a range of home lending options for each type of borrower. The right mortgage for you depends on factors like credit, down payment and whether you qualify for a government backed program.

Below is a quick reference to help you compare mortgage loan options.

Conventional Loans

1st Lien Mortgages

• Fixed-Rate Mortgages offer predictable monthly payments and long-term stability.
• Adjustable-Rate Mortgages (ARMs) may provide lower initial rates and can be a good option depending on financial goals.

2nd Lien Mortgages

• Fixed-rate financing is secured by the equity in a property
• Can be used to access funds while maintaining an existing first mortgage.

Government-backed Loans

Ready to make homeownership a reality? Here are some loan programs for borrowers that meet certain qualifications.

• The CalHFA FHA program offers a 30-year fixed-rate mortgage with flexible qualification guidelines and potential access to down payment assistance.
• FHA Loans make homeownership more accessible through flexible qualification requirements.
• VA Loans are a home loan guaranty benefit for eligible veterans, active-duty service members, and qualifying military families.
• USDA Loans provide financing options for eligible homes located in qualified rural and suburban communities.

Specialty Loans

Jumbo Loans

Designed for home purchases that exceed standard conforming loan limits set by the FHFA. 

• Often used for high-value and luxury properties
• Qualification requirements vary from lender to lender
• May require a higher down payment

Non-QM Loans (Non-Qualified Mortgage)

Designed for credit worthy borrowers, like self-employed individuals or freelancers, that allows for flexible income verification and higher debt ratio

• Bank Statement Loans
• Alternative Income Documentation Options
• Available as First or Second Lien Loans

DSCR Loans (Debt Service Coverage Ratio)

A DSCR loan is designed for real estate investors or businesses to qualify for a loan based on the property’s rental income rather than personal income.

• Single-family, multi-family, condos or commercial properties
• Purchasing or refinancing
• Not for primary residences

Reverse Mortgages

A reverse mortgage lets eligible homeowners use the equity in their home and convert it into cash.

• For homeowners aged 62 or older who want to stay in their home
• Often used to supplement retirement income
• It’s important to understand the long‑term implications of this option

For More Information

At Community West Bank, we know there’s no such thing as one-size-fits-all, which is why we offer a full range of real estate financing options customized to fit your individual needs. Our experienced team of Real Estate Lending Specialists can help you find the right solution that aligns with your goals.

Equal Housing Lender | NMLS #459294