For decades, getting a mortgage meant meeting the standards of one primary credit scoring system: FICO. It was the undisputed benchmark for the entire industry. But that’s all changing. In a landmark decision that will redefine the path to homeownership in 2025 and beyond, a powerful new option has just been approved.
The Federal Housing Finance Agency (FHFA) has sent a shockwave through the Real Estate world by approving VantageScore 4.0 as a valid credit scoring model for all loans backed by Fannie Mae and Freddie Mac.
This isn’t just a minor policy update; it’s a revolutionary shift that opens up competition and promises to unlock the dream of homeownership for millions. At Crestico, we are on the front lines of this change, and here’s what you need to know about how this will reshape the Los Angeles and Southern California housing market.
What’s the Big Deal? A New Choice in Credit Scoring
For years, the traditional FICO model has been the main gatekeeper. It heavily relies on a long history of specific credit types, like credit cards, auto loans, and previous mortgages. If you didn’t fit that specific profile, you were often overlooked, regardless of your actual financial responsibility.
VantageScore 4.0 breaks that rigid mold. Its advanced model is designed to see a bigger financial picture by including alternative data.
Rent & Utility Payments: Have you paid your rent and utilities on time for years? VantageScore can now use that history to build your credit profile, something traditionally ignored. 👏
Thin Credit Files: Don’t have multiple credit cards or a long loan history? VantageScore is better at scoring consumers with “thin” credit files, giving a more accurate picture of their creditworthiness.
Inclusivity: This model is designed to be more inclusive of gig workers, young buyers, and new Americans who may not have a traditional credit footprint but are financially reliable.
This shift means your responsible financial habits—like paying your rent on time—can finally help you qualify for a home loan.
A Flood of New Buyers: Who Wins in This New Era?
This change is expected to be a game-changer for several groups who have been unfairly sidelined by the housing market. We anticipate a surge of new, qualified buyers entering the market, including:
Responsible Renters: Millions of Californians who have been paying sky-high rent on time can now leverage that payment history to their advantage.
The Gig Economy Workforce: For the countless freelancers, contractors, and entrepreneurs in Los Angeles, this new model offers a fairer evaluation of their financial stability.
Young & First-Time Home Buyers: Younger generations who are more likely to have thin credit files but are otherwise financially savvy now have a clearer path to securing a mortgage.
According to industry estimates, this single policy change could allow up to 5 million new buyers to enter the U.S. housing market. For a competitive market like Southern California, this infusion of qualified buyers is monumental.
Market Impact: What This Means for LA Sellers and Investors
This news isn’t just for buyers. The ripple effects will be felt across the entire real estate ecosystem. 📈
For Sellers: A larger pool of qualified buyers means more demand for your property. This can lead to more competitive offers, less time on the market, and a stronger negotiating position. Your home is now accessible to a brand-new segment of the population.
For Investors, Flippers, and Wholesalers: The “exit strategy” just got a massive boost. With millions of new retail buyers entering the market, flippers will have a broader audience to sell their renovated properties to. Wholesalers can expect to move contracts faster as the number of potential end-buyers skyrockets.
How Crestico Can Be Your Guide in This New Landscape
A changing market creates incredible opportunities, but it can also be confusing. As a forward-thinking real estate and Mortgage Brokerage, Crestico is already ahead of the curve. Our team is working closely with lenders who are early adopters of the VantageScore 4.0 model.
For Aspiring Home Buyers: Did you think homeownership was out of reach? It’s time to find out for sure. We can help you understand your VantageScore, connect you with the right lenders, and see if you now qualify for your dream home.
For Savvy Sellers: The market is about to get even hotter. Let us help you position your property to attract this new wave of buyers and maximize your return on investment.
This is more than a new rule—it’s a new era of access and affordability in real estate. Don’t navigate it alone.
Contact the experts at Crestico today. Let’s explore what this historic change means for you.
Buying a home in Los Angeles can be both an exciting and overwhelming journey. With high Real Estate prices and fierce competition, understanding how to secure a mortgage is crucial for homebuyers, real estate investors, and even those looking to refinance. Whether you’re a first-time buyer, a seasoned investor, or a retiree considering a reverse mortgage, this guide breaks down the process step-by-step to help you get approved, lower your mortgage payment, and choose the right loan for your situation.
Crestico, a leading Mortgage Broker in Los Angeles, offers an extensive range of mortgage programs tailored to fit every buyer’s needs. Let’s dive in.
Why Understanding a Mortgage Matters
A mortgage is a loan used to purchase a property, typically paid off over 15 to 30 years. Understanding how mortgages work helps you make informed financial decisions that affect your long-term stability.
Los Angeles presents a unique housing market with diverse real estate opportunities but also significant challenges, including high home prices and competitive bidding. Having a solid grasp of mortgage fundamentals puts you ahead of other buyers and can help you secure the most favorable home loan terms available.
Step 1: Assess Your Financial Readiness
Before diving into mortgage applications, take a detailed look at your financial situation. This includes your:
Credit score: A higher score can help you secure better mortgage rates.
Debt-to-income ratio (DTI): Lenders typically prefer a DTI below 43%.
Savings for down payment and closing costs.
Use a Mortgage Calculator to estimate what you can afford monthly and the total loan amount you might qualify for. Crestico’s online tools make this easy.
Step 2: Get Pre-Approval
Pre-approval is a lender’s written offer to loan you a specific amount under certain terms. This shows sellers you’re a serious buyer and gives you a competitive edge in hot markets like Los Angeles.
Crestico streamlines this process by offering a digital application and a dedicated loan originator to walk you through it.
Step 3: Choose the Right Mortgage Program
There are many types of mortgages, and the best one depends on your financial goals and qualifications. Here are some common options available through Crestico:
Fixed-Rate Mortgage
Stable interest and monthly payments.
Adjustable-Rate Mortgage (ARM)
Starts with a lower rate, adjusts annually.
FHA Loan
Low down payment, government-backed. Ideal for first-time buyers.
These alternative Loan Programs are designed for self-employed individuals, real estate investors, and others who don’t fit traditional lending molds.
Step 4: Shop Around for Mortgage Brokers
Working with a mortgage broker gives you access to multiple lenders and helps you find competitive mortgage rates. Crestico compares offers from dozens of lenders to find the most suitable match.
Don’t just accept the first quote—compare Interest Rates, loan terms, and total costs. Use a mortgage calculator to run the numbers.
Step 5: Lock in Your Interest Rate
When you find a favorable interest rate, ask your lender to lock it in. Rates can fluctuate daily based on economic conditions, so timing is crucial.
A rate lock typically lasts 30 to 60 days. Make sure you can close within that timeframe to avoid losing your locked rate.
Step 6: Complete the Mortgage Application
After selecting a loan, complete the full application process. This includes:
Home appraisal
Home inspection
Title search
Underwriting
During this stage, it’s crucial to avoid major financial changes such as opening new credit lines or making large purchases.
Crestico ensures a streamlined and quick process with expert guidance at each step.
Step 7: Closing and Beyond
At closing, you’ll sign final documents and pay any remaining costs. Your lender will fund the loan, and you’ll officially become a homeowner!
Crestico specializes in Self-Employed Loans, offering flexibility with documentation like bank statements, P&L statements, and 1099s.
Investment & Commercial Loans
Investors can benefit from Crestico’s expertise in:
DSCR Loans
Fix and Flip Loans
Bridge Loans
Commercial Mortgage options
Reverse Mortgages for Seniors
Available to homeowners aged 62+, this option provides tax-free income while retaining homeownership.
Why Choose Crestico in Los Angeles
Crestico has over a decade of experience helping clients navigate the complexities of real estate financing in Southern California. Here’s what sets them apart:
Extensive loan program variety
Quick pre-approvals
Transparent process
Expertise in Non-QM loans
Personalized service from licensed loan originators
Local market knowledge for areas like Woodland Hills, Encino, and beyond
Securing a mortgage in Los Angeles doesn’t have to be overwhelming. With the right preparation, tools, and guidance from a trusted broker like Crestico, you can move confidently toward homeownership, investment, or Refinancing.
Take the first step today by getting pre-approved and exploring your loan options. Whether you want a low rate, flexible terms, or access to specialized loans like Self-Employed Loans, Crestico is ready to help.
Every year in the USA, there are millions of existing homes that are bought and sold. These homes come in all shapes and sizes, as well as in various conditions. While some people want a move-in ready home, others might want a fixer upper.
When many people buy a fixer upper home, they are doing it so they can quickly Fix and Flip the home. Fixing and flipping a home is buying it for a cheap price, fixing it up quickly and relatively affordably, and then selling it for a profit.
However, fixing and flipping isn’t the only use for a fixer upper. The costs can add up, a lot of work is involved and the time it can take to sell the home can be plentiful. With that in mind, this article is going to look at a few other ways to put your fixer upper to good use.
As an Airbnb
When people used to visit or stay in a new city, they would almost always stay in a hotel. However, in recent years, that has begun to change. A big reason for this is Airbnb. Airbnb allows anyone to rent out their home by night, similar to how a hotel will rent out a room. This often gives customers more bang for their buck, and allows homeowners to make money without doing a thing.
Sure, you will have to keep the place clean, stock it with items and perform a bit of customer service, but that is a small price to pay for what you can make. You will need to fix up your fixer upper to a point where it is livable, but renting it out nightly through Airbnb is significantly less work than completely renovating it and selling it.
As a Vacation Rental
While this will depend largely on where you live, you could also rent your home out as a vacation rental. For example, millions of people travel to California every single year, and they need a place to stay. If your fixer upper home has a good location, it could be perfect as a vacation rental.
You could rent it out weekly or monthly to interested parties, and potentially make thousands of dollars. You will need to update it and ensure it functions well and looks nice, but think of this as an investment than a cost. Sure, selling a house from ISoldMyHouse.com can be a good idea and can net you a lot of money, but be sure to consider putting the home up as a vacation rental as well. This could allow you to make a good amount of money, without actually having to lose the asset.
As a Standard Rental Property
Another option instead of fixing up and selling your fixer upper is to fix it out and then rent it out. Being a landlord is indeed some work, but can be incredibly fruitful financially. Depending on the size, location and look of the home, it can be rented out to families, couples, university students or anyone.
Oftentimes, you will essentially be able to get your mortgage paid for if you rent out the home. In some cases, you may even be able to charge more in rent than your mortgage if you include utilities or internet. While you will essentially be breaking even for a little, once the mortgage is paid off, the rent you collect will be nothing but pure profit.
In conclusion, there are many different things you can use a fixer upper for, in addition to simply fixing and flipping it.
Multifamily Real Estate is typically a diversification option for versed investors, and not a first-timer’s leap of faith. You need knowledge, expertise, and the negotiation skills to match the level of competitiveness in this industry, but it also makes for a wonderful choice in case you’re already familiar with real estate investing in general, and you’d like to enrich your portfolio further. This profitable choice can bring you a stable source of income, and it can serve as a stable, long-term investment that you can ultimately sell if such a need ever arises.
However, no matter how experienced you might be in other forms of real estate investing, jumping into this versatile field takes some research and adjustments. Let’s go over a few handy tips you can use on your own journey in order to make the most of this lovely opportunity!
Deciding on the location
Not all multifamily properties are created equal. In fact, among many factors that will affect their overall value and desirability in the eyes of your future tenants, one of the main deal-breakers can be the location. Since your target buyers and renters are families, you should consider features that will appeal to such an audience. Is there a reputable school in the vicinity? How about a playground? Are there safety measures in the neighborhood, such as regular patrol and security surveillance?
There are all kinds of conditions that might inspire a family to feel welcome in that particular location, so it’s vital to do your homework. That way, you can pick a location that will elicit offers before the ink dries on your investment contract.
Managing the management
Unlike one-person units and other real estate options that don’t focus on families, working with multifamily real estate properties requires quite a bit of legal knowledge and managerial skills. Whether you decide to be the key manager of the entire property you invest in, or you choose to hire a property manager, the decision is entirely yours. What matters most is that you have a solid base and that you fulfill all of your legal obligations.
One of those responsibilities includes obtaining the initial maintenance schedulefor your property so as to compile the most relevant data on how you take care of your property. That means you need to follow the prescribed legal rules and meet your local government’s expectations when it comes to property maintenance in order to avoid financial and other penalties. If you alone cannot handle the burden of multifamily real estate management, make sure to work with an expert who can take over a portion of those chores.
Land on the right financing solution
A common issue even among versed investors is obtaining the right sum of money to purchase the property you find the most lucrative. These massive investments require a stable financing solution so that you can have that much-needed initial capital for this venture. Direct lenders are considered a safe and reliable option while partnering up with other investors is another viable opportunity especially if you already have trusted partners in the business.
Increase the value of your investment
Who said that being an investor is a dull occupation? On the contrary, if you choose to invest in multifamily real estate, you’ll need your creativity and imagination so that you can amplify the value of the properties you purchase. From increasing functionality of the space and installing a ground source heat pump, all the way to beautifying the exterior with finer design solutions, even the smallest of changes can lead to a major surge in value.
Sometimes, you’ll be able to find properties in a pristine location, but in desperate need of a thorough restoration or remodeling in order for them to be rentable. Make sure that this is an investment that is in line with your budget, and you’ll have a diamond in the rough in your hands, ready to become a prime spot for families after spruce.
Plan your tenant strategy
Finally, never invest in a property without preparing a strategy for your tenants. With the right policies in your hands and clearly defined procedures, you’ll be able to attract the right people to your property in no time.
Multifamily investing is a perfect opportunity to diversify your portfolio, and an exciting way to grow your community. Use these tips, and turn this endeavor into a streamlined journey towards purchasing your first multifamily property!
Through a $1 million gift from the REALTORS® Relief Foundation, C.A.R. is offering disaster relief grants up to $2,000 per household to provide housing assistance with mortgage relief or temporary housing, such as payments on the mortgage of a primary residence that was burned in a fire, lease or rent payments on replacement housing, or payments to a temporary shelter.
Grant details:
Relief assistance is limited to a maximum of $2,000 per applicant household. The deadline for application submission is June 30, 2019, contingent on the availability of funds.
Assistance is for housing relief only; other expenses including mortgages on property other than a primary residence, vehicle purchase, rental, repair and or mileage are ineligible for reimbursement under this program.
Documentation requirements: proof of residency, proof of lease/ownership, proof of damage/loss.
One application per household.
Grants are available only for the applicant’s primary residence.
Recipients of other financial assistance (FEMA, charitable groups) are eligible.
If you are in the Los Angeles area, have any questions or Real Estate sales or financing needs, feel free to contact us www.crestico.com/contact
