The VA loan program is being heavily utilized by Orange County residents for the first time in several years. There are several reasons for this.
VA 100% Financing for Orange County, CA Homes to $737,500
The VA loan program is a great program for those that are eligible. Fannie Mae/Freddie Mac require a minimum of 10% down payment for a home in Orange County. Even FHA, which is a great program, requires a 3.5% down payment. To make the comparison even better, while FHA has Monthly Mortgage Insurance equal to .55% (essentially adding .55% to the interest rate) VA has no monthly mortgage insurance. This can save thousands of dollars a year for VA eligible home buyers.
How Do I Find Out if I am Eligible for a VA Loan in Orange County?
To obtain VA home loan veteran benefits you must have served on active duty in the Air Force, Army, Coast Guard Navy or Marine Corps and have been honorably discharged. You may still be entitled to benefits if you were discharged under other than honorable circumstances. This requires further research by the VA. In the end the VA makes the final determination.
The first thing you need to obtain in order to use your VA Entitlement is a VA Certificate of Eligibility. If you do not have one already we would be happy to assist you in getting one. The process is quick and easy. Just call our office and we will be glad to send out to you a VA Form 26-1880 or request for COE. Simply fill it out and return it to the VA and you should have your COE within a couple of weeks. If you are in a hurry, you may visit your local VA Office and have your COE in as little as one day.
If you are looking to purchase a condo, you must first check to make sure the condo project is on the VA Approved Condo List.
What is the First Step in Getting PreApproved for a VA Loan in Orange County?
VA loans, like FHA and Conventional Fannie Mae and Freddie Mac loans, require full income documentation to qualify. Really, all mortgage loans are full doc these days. This means that to qualify for a VA loan, besides having the property, VA Entitlements, and supplying a DD214 and then Certificate of Eligibility, the Veteran will need to provide the following items:
One of the best things about a VA loan for Orange County home buyers is the VA Streamline Refinance program, or IRRRL, which allows VA borrowers to quickly and easily take advantage of low rates with having to appraise the property or even provide all the income documentation that is needed during the initial purchase.
Who Actually Funds Orange County VA Loans?
You just need to find an Orange County VA Lender. A Direct VA Lender will process, underwrite, and fund your VA loan, rather than just originate and then "broker" to another lender. You will also want to find a loan officer who has experience with VA loans and can provide you with a loan scenario showing a complete break down of the purchase price, loan amount, payment, and closing costs involved with a VA loan. It is important to get as educated as you can on all that goes into getting a VA loan before you actually begin making offers on homes.
Authored by Tim Storm, an Orange County, CA Loan Officer - Please contact my office at Frost Mortgage Lending Group for more information about an Orange County, CA home loan. 877-786-4243 x 7. Ask for Tim Storm.
Contact us for your Orange County VA Mortgage:
Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.
877.786.4243 x 7 | tstorm (at) ochomebuyerloans.com
* Licensed by California Dept. of Real Estate. Lic. # 01190897
Orange County homebuyers planning on purchasing a condominium using FHA financing have always needed to make sure the condo project they are looking to buy is in an FHA Approved project. Buyers and Realtors can quickly determine whether a project is approved by visiting the HUD website and typing in a project name or tract number. It is even possible to print out a list of approved projects within a city or zip code. But what happens if a condo project is not on the list? The answer has been to use the FHA Condo Spot Approval Process. The Spot Approval process allowed a lender to close an FHA loan on an individual condo unit within an unapproved complex. However, as of the June 12 release of FHA Mortgagee Letter 2009-19 the Spot Approval is gone.
Why Was the Spot Approval Process Eliminated?
HUD felt that FHA loans were closing on condo's within projects that would not have been approved by FHA. There was a feeling that lenders were "getting one over on FHA". There also has been concern that some complexes have deferred maintenance but are short on reserves and will need to charge a special assessment in the near future.
So What Now?
There is a silver lining. As of this writing there are a lot of condo complexes in Orange County that are not on the FHA Approved list. There hasn't been much incentive for a lender or Realtor to get a project approved when the Spot Approval could be done relatively easy by the lender. Now, in order to close an FHA loan in a non approved project the lender will need to submit a full Condo package to HUD and get the project approved. Once approved, the project will remain on the list for 2 years before needing to be reviewed again. This should help to expand the approved list fairly quickly. In the short run it will mean more work for the lender and maybe a little longer escrow period, say 45 days instead or 30 days (if your Orange County FHA loans aren't closing in 30 days or less then check this out).
What is Needed for Project Approval?
It's really not much different from what was needed for the Spot Approval. A complete CCR package, including the articles of incorporation, bylaws, plat map, budget, reserve study, outstanding or pending litigation analysis, and a special assessment analysis. Also, no more than 30% of the current units can have FHA financing, and at least 50% (it used to be 51%) of the units must be owner occupied.
Don't let these changes scare you away from FHA financing when it comes to a condo. FHA is still the most flexible loan product there is when it comes to down payment (3.5%), where the down payment can come from (gift), and credit (FICO as low as 600). It is just very important to work with a lender or loan officer who has a thorough understanding of FHA.
Authored by Tim Storm, an Orange County, CA Loan Officer - Please contact my office at Frost Mortgage for more information about an Orange County, CA home loan. 877-786-4243 x 7.
Contact us for your Orange County FHA Mortgage:
Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.
877.786.4243 x 7 | tstorm (at) ochomebuyerloans.com
* Licensed by California Dept. of Real Estate. Lic. # 01190897
The first thing an Orange County First Time Home Buyershould do is get PreApproved for an FHA loan. (If you are eligible for $0 down VA, then PreApproved for a VA loan.) Too many times new home buyers, even move up home buyers, begin the home buying process by looking for homes and then even making an offer before talking to a lender. That can be a tempting thing to do. Who wouldn't want to check out homes in some of the cities of Orange County such as Placentia, Brea, or Fullerton? FHA financing can buy a great home in Placentia. This can lead to a major let down when they find out they won't qualify for the home they have fallen in love with or are not comfortable with the total PITI payment (principal, interest, taxes, and insurance) necessary for the home of their dreams.
What is the First Step in the Orange County Mortgage PreApproval Process?
One quick phone call to a reputable lender or loan officer is all it takes. Hopefully you will find someone who is well versed in FHA loan guidelines and can answer any and all questions that you come up with. A good loan officer should be able to quickly "prequalify" you based on a few quick questions. Below are some questions to think about before calling the loan officer.
Based on the answers to these questions an FHA Expert Loan Officer can put together loan scenarios that will give you a complete breakdown for buying an Orange County home with an FHA loan. The loan scenarios should show the purchase price, loan amount, payment breakdown, debt to income ratios, closing costs, down payment, and amount needed to close escrow. Going through these numbers line by line with the loan officer will give you a good understanding of all (or at least a good part) that goes into buying a home. However, you are not yet PreApproved. You are only PreQualified.
So Now I'm PreQualified. What is Needed to Get Fully PreApproved?
Now that you have a good idea of the purchase price range you are shooting for, you will want to go all the way and get PreApproved. For PreApproval, everything you verbally told the loan officer for the PreQualification is now verified. Now, the loan officer will complete a loan application, which can be done on the phone or in person. Orange County Loan applications can also be done online. You will also need to fax or email the following information.
The loan officer will run a credit report showing the credit score, or FICO scores. Next, the loan officer will run the loan application through an Automated Underwriting Engine, which will (hopefully) deliver the loan approval you are shooting for. An underwriter (if you are working with a Direct Orange County FHA Lender) will review the documentation you have sent in and issue the loan PreApproval. The loan officer can then prepare a PreApproval Letter or Certificate, letting your Realtor know what price you are PreApproved for. Your Realtor will include the PreApproval letter with any offers you make, which lets the listing agent and sellers know that you have already met with a lender and been PreApproved and are ready to close escrow fast.
Is There A Cost to Get PreApproved?
Not usually. Most lenders will do it for Free. What is most important is finding an Orange County FHA Loan Officer you are comfortable with and who can deliver on what they are promising. So before you go out and start looking at homes, make sure to talk to a lender first.
Authored by Tim Storm, an Orange County, CA Loan Officer - Please contact my office at Frost Mortgage for more information about an Orange County, CA home loan. 877-786-4243 x 7.
Contact us for your Orange County FHA Mortgage:
Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.
877.786.4243 x 7 | tstorm (at) ochomebuyerloans.com
* Licensed by California Dept. of Real Estate. Lic. # 01190897
In Orange County, homebuyers are finding out how quickly interest rates can go up. After several bad days for Mortgage Backed Securities, FHA interest rates have increased anywhere from .5% to 1% just in the last 10 days. Interest rates had dipped as low at 4.5% for FHA loans under $417,000 and 5% for FHA loans over $417,000 up to $729,750. Now rates are ranging from 5.5% to 5.75% for loans under $417,000 and 5.75% to 6% for FHA loans over $417,000.
How Much Will this Effect Orange County First Time Home Buyers?
For most people, the increase will have very little effect on what they qualify for. For example, a .25% rate increase will translate into a payment increase of approximately $15 per $100,000. So on a $300,000 loan, the monthly payment will be approximately $45 more per month with a .25% rate increase, or $90 per month with a .5% rate increase. From strictly a "debt to income rate" perspective, this should only increase the qualifying ratios by 1%-2%. Unless a buyer was pushing their debt to income ratios to the maximum limit there should be little problem in keeping currently PreApproved FHA home buyers approved for the price range they are interested in. The bigger issue will be the buyers payment comfort level. It can be tough for a first time buyer who was prepared for a certain payment only to see that payment increase because of an unexpected interest rate increase.
Will Interest Rates Come Back Down?
It's possible. However, there is also talk among the experts that rates could increase further. Historically we are still at very low rates even with the recent increase. One of the best features of FHA is the FHA Streamline Refinance program. This program does not require an appraisal, income or asset documentation. For a buyer who closes escrow with a 5.75% rate now, if rates drop to 5%, they could take advantage of the Streamline Refi and get the lower rate.
Orange County Rent vs Own Analysis
This is a great time to buy a home. With interest rates still very low and property values lower than they've been in years, this is the time to buy a home. Not to mention the First Time Home Buyer Tax Credit of $8,000, which goes away December 1, 2009. The first step is to talk to a lender. Find someone who can answer all your questions, and request a Rent vs Own Analysis.
Authored by Tim Storm, an Orange County, CA Loan Officer - Please contact my office at Frost Mortgage for more information about an Orange County, CA home loan. 877-786-4243 x 7.
Contact us for your Orange County FHA Mortgage:
Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.
877.786.4243 x 7 | tstorm (at) ochomebuyerloans.com
* Licensed by California Dept. of Real Estate. Lic. # 01190897
Orange County FHA loan limits are higher in 2009 than they have ever been, allowing for home buyers to purchase "high priced" homes with only 3.5% down payment. Just last year, at the beginning of 2008, the highest the Orange County FHA limit had ever been was $362,790. In mid 2008 the limit was increased substantially to $729,750. For a few months at the beginning of 2009 the limit was down to $625,500, but in March was again increased to $729,750.
What Does this high loan limit do for an Orange County home buyer?
This allows an Orange County FHA first time home buyer (or any home buyer) to purchase a home for $755,000 with only 3.5% down payment. For a price that high their income would need to be at least $165,000 per year, verifiable, but that's a lot of leverage in a finance environment that is supposed to be tight.
What is an FHA Jumbo Loan?
An FHA Jumbo loan is any FHA loan in Orange County (for a single family home) with a loan amount greater than $417,000. Different counties have different loan limits. Click here to see southern California FHA loan limits. Los Angeles has the same loan limits as Orange County.
Even at these high limits only a 3.5% down payment is needed. The down payment can be a gift or come from a 401K. FICO scores need to be at least 620, and non-occupant co-borrowers are allowed. The loan program is a 30 year fixed rate, and interest rates are low.
What is the first step in finding out how much of an Orange County FHA loan I qualify for?
The first step is to contact a Direct FHA Lender in Orange County, CA who can prepare personalized FHA loan scenarios. This should be done prior to searching for a home in order to avoid the frustration of looking at homes that may be out of reach. Once a buyer has an idea of what they are qualified for they should get PreApproved for an FHA loan. This involves having the lender review tax returns, paystubs, bank statements and credit. Once PreApproved, it is time to begin the home search.
Authored by Tim Storm, CMPS, Sr. Loan Officer with Frost Mortgage, a Direct Endorsed FHA Lender located in Irvine, CA. For information on FHA, or to be prequalified please call 877-786-4243 x 7.
Frost Mortgage is a division of PRMI. We are a Direct FHA, VA, and Conventional lender. We specialize in working with 1st Time buyers. We fund FHA, VA and Conventional loans.
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