Mortgage Pre-Approval and Home Loans in California

I'm Jeff Moran, NMLS #483943, licensed to originate mortgages in California through C2 Financial Corporation.

California closes real estate through escrow, and almost everything else about a California closing follows from that. There is no attorney requirement, there is no single statewide custom for who pays what, and — despite what people assume about the most technology-forward state in the country — you still cannot sign your loan documents over a webcam here.

If you have bought a home in an attorney state, or you are moving to or from California, this is the page worth reading before you write an offer.

Start with the pre-approval

Do the qualifying work before the address. A documented pre-approval means income, debts and credit have actually been reviewed rather than estimated, and it means problems surface while they are still cheap.

You can run the first pass anonymously, before I know your name — see your numbers — and what a real pre-approval involves covers the rest. No letter from anyone is a loan commitment; final approval depends on the property, the appraisal and full underwriting.

Escrow, not an attorney — and the escrow officer is not on your side

California is not an attorney-closing state. A neutral escrow holder carries out the written instructions both sides agree to: it holds the documents and the money, confirms the conditions have been satisfied, records the instruments, accounts to the parties, and disburses.

The word doing the work there is neutral. An escrow officer is not your representative and cannot give you legal advice. People arriving from a state where a lawyer runs the closing expect somebody in the room to be looking out for them, and in California that person is your agent, your lender, or an attorney you engage yourself.

Who the escrow holder is depends on where you are, which is the first appearance of a split that runs through this whole page:

• Southern California — usually an independent escrow company licensed by the Department of Financial Protection and Innovation.
• Northern California — usually a title insurance company, typically combining title and escrow in one place.

The choice is a contract term the principals agree on. A broker may recommend an escrow holder but cannot make using a particular one a condition of the transaction.

The north-south split, which is the defining California fact

There is no single California custom for who pays for the owner's title policy. The Department of Insurance states it plainly:

• Southern California: the seller customarily pays the owner's premium.
• Northern California: the buyer customarily pays, or the two split it.
• The lender's policy: the buyer pays, in almost every county.

Escrow fees vary the same way — Southern California commonly splits them, Northern California practice differs county by county.

These are customs, not law, and the contract controls. Which means two things worth acting on. If you are moving within California, the allocation you remember from your last purchase may not apply four hundred miles away. And if you are moving to California from a state with a settled statewide custom, there is nothing here to inherit — it is a term to negotiate. Who pays for the owner's policy across the country puts California in context, and the short version is that most states have no rule at all.

One useful consequence: the party paying the premium chooses the title insurer. So in Southern California that choice usually sits with the seller, and in Northern California usually with you.

Transfer tax is local, and you have to check the city too

California's documentary transfer tax is authorised by state law but adopted by counties and cities — it is not one uniform statewide levy. Some cities impose an additional city transfer tax on top of the county's.

That is why a "California transfer tax" figure from a calculator is close to meaningless. The jurisdictions have to be checked for the actual property, and a city line can be the difference between two addresses a few miles apart.

An ordinary refinance does not trigger it. A refinance records a deed of trust and transfers no ownership, so it is not a taxable transfer. Recording charges still apply. If a deed is used to change ownership as part of a refinance, that is a separate question and needs its own analysis.

Who customarily pays it: in Southern California, the seller usually pays the county documentary transfer tax. As with everything else here, state law imposes no universal allocation.

I am not printing rates. They are set locally and revised locally, and a number that is right in one city and wrong in the next is worse than none. The estimator prices the actual jurisdictions against your scenario.

You cannot close by webcam in California

This one surprises everybody, and it is the opposite of what people assume.

As of this writing a California notary cannot perform remote online notarization. The signer must physically appear before the notary. Electronic notarization exists, but it carries the same personal-appearance requirement as a traditional one.

There is a future framework — SB 696 created one — but it does not commence until the Secretary of State certifies the required technology project is complete, or January 1, 2030, whichever the statute reaches first.

So if you are buying in California from out of state, plan to appear in person before a notary, and settle how that will work early rather than in closing week. California may recognise a qualifying out-of-state notarial act in some circumstances, but whether your lender and title company will accept an out-of-state remote notarization on a California land instrument is transaction-specific and is not something to count on.

The wider version of this question — three gates, not one explains why "my state allows it" is rarely the whole answer anywhere.

Title insurance is competitive here, and the state says to shop it

California title rates are filed with the Insurance Commissioner by each company rather than promulgated as one statewide schedule. A filing has to reach the Department at least thirty days before it takes effect, and a company must charge consistently with its filed schedule — undisclosed discounts are unlawful.

Rates and services genuinely differ between companies, and the Department of Insurance advises consumers to compare them. Escrow and title can be placed with different companies, which matters most in Southern California where the two functions are commonly separate anyway.

Ask about a reissue or refinance discount if there is an existing policy on the property. The Department says a client with a prior policy may qualify — availability, amount and proof all depend on the selected company's current filed schedule, so it is worth asking for by name rather than assuming.

What this means practically

• Know which California you are in. The north-south split decides who pays for title and how escrow is handled.
• Read the cost allocation in the contract. There is no statewide default to fall back on.
• Check the city as well as the county for transfer tax.
• Plan to sign in person. Remote online notarization is not available here yet.
• Shop title and escrow — the state itself says to, and they can be separate companies.
• Ask about a reissue discount if there is a prior policy.
• Remember the escrow officer is neutral. If you want somebody advising you, that is a different person.

Where to start

Run your numbers — no credit pull, no account, nobody calls you. Rates for your scenario, your debt ratio, and closing costs priced for the actual California jurisdiction rather than a statewide average.

When you want the letter behind you, here is what a real pre-approval involves. And if you are moving to or from California, what actually changes when you cross a state line is the wider picture — this page is the California half.

Common questions

Do I need an attorney to close on a house in California?

No. California closes through a neutral escrow holder rather than requiring an attorney. The escrow holder carries out both sides' written instructions, holds documents and funds, records the instruments and disburses. An escrow officer cannot give legal advice to either party, which surprises buyers arriving from attorney-closing states who expect somebody at the table to be advising them.

Who pays for title insurance in California?

It depends which part of the state you are in, and it is custom rather than law. The Department of Insurance reports that in Southern California the seller customarily pays the owner's premium, while in Northern California the buyer customarily pays or the parties split it. The buyer pays for the lender's policy in almost every county. The purchase contract controls in every case, and the party paying the premium chooses the title insurer.

Can I close on a California home remotely?

Not by remote online notarization. A California notary cannot currently perform one — the signer must physically appear, and electronic notarization carries the same appearance requirement. SB 696 created a future framework that does not commence until the Secretary of State certifies the required technology project or January 1, 2030, whichever the statute reaches first. Plan on appearing in person and settle the logistics early.

Does California have a transfer tax?

Yes, but it is local rather than statewide. State law authorises counties and cities to adopt a documentary transfer tax on instruments transferring real property, and some cities impose an additional tax on top of the county's. The applicable jurisdictions have to be checked for the specific property, which is why a single statewide figure is not meaningful.

Do I pay transfer tax when I refinance in California?

Not on an ordinary refinance. Documentary transfer tax is triggered by a transfer of ownership, and a refinance records a deed of trust without conveying the property. Recording charges still apply. If a deed is used to change ownership as part of the transaction, that is a separate matter requiring its own exemption and tax analysis.

Can I choose my own escrow and title company in California?

Largely yes. The escrow holder is a contract term the principals agree on, and a broker may recommend one but cannot make using a particular company a condition of the transaction. For title, the Department of Insurance says the party paying the premium selects the insurer, subject to lender standards — and because rates are filed by each company rather than set uniformly, the Department advises comparing them.