Loan Calculators
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Estimated Monthly Payment
$3,311
Estimates only. Contact Steven for exact figures.
What goes into a California mortgage payment
Here's what I'd want you to know: your monthly payment is more than just principal and interest. In California, there are several pieces that add up. Let's break them down in plain English.
Principal and interest (P and I): This is the core of your payment. Principal pays down the money you borrowed. Interest is what the lender charges you for borrowing it. Together, this is what most people think of as "the mortgage payment."
Property tax: In California, property taxes run roughly 1.25% of the purchase price per year. On an $800,000 home, that is about $10,000 a year, or $833 a month. This gets collected as part of your monthly payment and held in an escrow account.
Homeowners insurance: Your lender requires you to insure the home. In California, this typically runs $1,000 to $2,500 a year depending on the home, the coverage, and the location. Wildfire zones can cost more.
HOA (if applicable): If you're buying in a community with a homeowners association, you'll have monthly dues. These can range from $50 to $500 or more and cover things like common areas, pools, and exterior maintenance.
Mortgage insurance: If you put less than 20% down on a conventional loan, you will pay private mortgage insurance (PMI). FHA loans have mortgage insurance premiums (MIP). VA loans do not have monthly mortgage insurance. PMI can be removed once you reach 20% equity. MIP on FHA typically stays for the life of the loan.
What is DTI and why does it matter?
DTI stands for debt-to-income ratio. It's the percentage of your monthly income that goes toward debts. Lenders use it to figure out how much house you can afford.
Here's how it works: add up all your monthly debt payments (the new mortgage, car loans, student loans, credit card minimums, child support, and so on) and divide by your gross monthly income (before taxes). That's your DTI.
Most loan programs have two DTI limits. The front-end ratio looks at just your housing payment. The back-end ratio includes all debts. Here are the general maximums by loan type:
Conventional
Generally up to 50% back-end DTI for well-qualified borrowers. Most lenders target 45% or below.
FHA
Up to 57% back-end DTI with compensating factors. Often more flexible than conventional.
VA
Typically up to 41% back-end DTI, but can go higher with residual income and strong credit.
DSCR (investors)
No personal DTI requirement. Qualifies on the property's rental income instead.
Here's the thing: just because you can qualify at a high DTI doesn't mean you should. I'll help you find a payment that fits your life, not just one that fits a lender's formula. Run the numbers above, then call me and we'll talk through what makes sense for you.