A family preparing to move to Pasadena decided to get pre-approval letters from three lenders before choosing a property. Despite having the same credit score and income, the interest rates offered varied significantly among the institutions. It was only after confirming these differences that the family could determine the right loan program for them.

The median sale price in Pasadena was $1.15 million as of July 2026 (citing The Real Deal, California Association of Realtors). During the same period, Zillow's self-estimated price index was $1,213,522, which is a 0.4 percent decrease from the previous year. When looking solely at single-family homes, the median price reached as high as $1.55 million in the first quarter of 2026, indicating significant variation based on the type of housing.

Pasadena is located in Los Angeles County, which is classified as a high-cost area by the FHFA, with a conforming loan limit of $1,249,125 for 2026. The property the family was considering was priced around $1.15 million, which still fell within the conventional loan limit. However, if they opted for a single-family home or a neighborhood with a good school district, it was common to exceed that limit. In such cases, they would need to switch to a jumbo loan, which often requires a credit score of over 700 and a down payment of 10 to 20 percent, which is why they compared estimates from three lenders.

With a 20 percent down payment prepared, the family ultimately chose a conventional loan. The ability to start without PMI was a decisive factor; had their down payment been insufficient, they could have considered an FHA loan starting at 3.5 percent. However, it's important to note that if the down payment is less than 10 percent, MIP would remain for the duration of the loan, potentially leading to higher costs in the long run.

The family realized too late that when comparing estimates from the three lenders, they needed to consider not just the interest rates but also the closing costs and lock-in periods. Sometimes, the lender with the lowest interest rate charged higher origination fees, so it was only after comparing the APR side by side that they could see the accurate picture.

In neighborhoods like Pasadena with good school districts, inquiries from Korean families are consistently high, and competition for properties near popular school districts means that the credibility of pre-approval letters becomes even more important during the offer stage. Having a lender pre-selected and a strong pre-approval letter ready can give an advantage in the competitive bidding process.

For families with a short expected residency or those planning to move to another area in the future, minimizing initial costs may be more beneficial than buying points to lower the interest rate. Conversely, if there is a clear plan to stay long-term, considering buying points to reduce long-term interest burdens may be worth exploring. Since the rate reduction per point varies by lender, it's advisable to ask about this when comparing estimates from the three lenders.

Pasadena is an urban residential area and does not fall under the rural designated areas eligible for USDA loans. Families moving from out of state should recalculate California's property tax rates and fire insurance conditions. For properties near school districts preferred by Korean families, it's advisable to refer to ratings from GreatSchools or Niche, but since school district boundaries change frequently, it's important to verify the assigned school for the address before purchasing.

If approaching from an investment perspective, it's also important to consider that in high-priced areas like Pasadena, rental yields may be lower compared to purchase prices. Ultimately, whether the property price falls within the high-cost area limits and how much down payment capacity exists will determine the loan program. This article does not constitute investment or legal advice, and it is recommended to consult with a loan officer and experts before finalizing any contracts. Tax or immigration-related procedures may vary based on individual circumstances, so consulting with an accountant or immigration attorney is also advised.