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>>Placentia FHA Mortgage Application
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As a Loan Officer working with a Direct Endorsed FHA lender serving Placentia, CA, I know how important it is to educate Placentia First Time Buyers on the benefits of the FHA and VA loan programs and how the FHA and VA loan programs will lead them to Home Ownership! For this article, I will focus on the FHA program.
FHA has more lenient underwriting guidelines compared to a Conventional loan (Fannie Mae), low down payment requirements (only 3.5% down), low fixed interest rates, and common sense underwriting. FHA mortgage loans are designed to meet the needs of First Time Home Buyers, although FHA is not limited to First Time Buyers but can also be used by Placentia Move Up Buyers.
I know there are many questions that a First Time Buyer will have, and my goal is to answer every question a Home Buyer comes up with. While I spend a lot of time updating my blog and First Time Buyer Fee Reports with the most current and relevant information possible, my main goal is to EARN your trust through communication and service.
If you would like a personal consultant or personalized FHA loan scenarios, please feel free to contact me directly at any time via phone, email, or online application.
Tim Storm with Frost Mortgage 877-786-4243 x 7
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Placentia FHA First Time Home Buyer / FAQ
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What is a Mortgage?
A mortgage is simply a financial agreement with specific terms of repayment between a borrower and bank or investor where real property (home) is used as collateral to secure the loan.
What is an FHA loan?
A loan insured by the Federal Housing Administration. FHA does not actually fund loans, they just “insure” the loan, which enable a lender to underwrite to FHA’s aggressive guidelines. FHA loan limits are high enough to handle most homes in southern California and Orange County. The Placentia FHA Loan limit for 2009 and 2010 is $729,750.
What is FHA Mortgage Insurance?
All type of Mortgage Insurance protect the lender in the event of default. There are two types of FHA Mortgage Insurance. First, there is Upfront Mortgage Insurance (MIP), which is typically financed into the loan at the closing. The second type is Monthly Mortgage Insurance, which is paid monthly with the mortgage payment. The MIP premium is 1.75% of the base loan amount on purchase transactions and 1.5% of the base loan amount on FHA Streamline Refinance’s. The monthly mortgage insurance is equal to .55% of the loan amount. FHA mortgage insurance is more flexible and cost effective for most First Time Home Buyers.
Where does mortgage money come from?
There are many different types of mortgage loans that are either backed by an individual bank’s deposits (portfolio loan), or funded by a group of investors through complex relationships on Wall Street which involve Mortgage Backed Securities, Government Sponsored Enterprises (GSEs) such as Fannie Mae and Freddie Mac. Investors or bank set the guidelines on the mortgage money they lend to homeowners. If a borrower has less than 20% down payment in a property, then a separate mortgage insurance policy is required which usually has another set of qualifying guidelines associated with it.
Can any mortgage company offer an FHA loan?
No. In order to originate and fund FHA insured mortgage loans, mortgage companies have to meet strict licensing requirements that include special FHA audits, as well as state and federal regulation. Working with an FHA licensed company should make you feel a little more safe and confident in the professionals you are trusting with your mortgage transaction, which for most people will be one of the biggest investments in their life.
How do I qualify for an Placentia FHA Loan?
To qualify for an FHA loan, underwriters will evaluate the following factors:
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Amount of mortgage loan amount
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Orange County, CA and Placentia FHA lending limits
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Borrower’s income, employment and other personal documentation
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Borrowers credit worthiness
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Borrowers initial down payment and funds to close
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Appraisal and other property conditions
How Do I Find the Right Home?
I strongly suggest you work with an experienced Placentia real estate agent who knows how to find the best listings available that will meet your guidelines. A good Realtor can typically set a buyer up on a real estate search engine that is directly connected to the Multiple Listing Service. (MLS) This will allow you to freely search for homes from the comfort of your own home.
What are the main benefits of buying a Placentia home right now?
One big reason is the combination of historically low interest rates along with afforrdable home prices. Placentia hasn’t been hit as hard as some other areas, but still, some neighborhoods have experienced 40% or more price drops. Although this has created multiple offers situations on many homes, prices are very affordable. Placentia First Time Home Buyers are finding that their mortgage payment, after considering the tax benefits, can be lower than their current rent payment. Opportunities like this don’t come along very often. On top of that, there is a new $8,000 First Time Buyer tax credit that makes the deal even better. Basically, the government is giving First Time Buyers $8,000 to buy a home!
What is my next step?
Good question. Before looking at homes or especiallymaking an offer, it is important to figure our the home financing options. A First Time Home Buyer should figure out what price they can qualify for, what payment they are comfortable with, and what their FICO (credit) score is. Many sellers these days will not even accept an offer unless a home buyer has been PreApproved already.
Since the mortgage processing and approval process may take a week or so, it is important to get a head start on the financing before looking at homes. You will have a much better negotiating position when you have an underwritten bank approval to go along with your offer to buy a home.
I work through a full strategy session with each of my clients before sending them out to find a home. Just as your real estate agent’s mission is to protect your interests with regards to your property investment, your loan officer has a fiduciary responsibility to make sure you obtain an affordable mortgage loan that you can feel safe and secure paying on over time.
Authored by Tim Storm, a Placentia, CA Loan Officer – Please contact my office at Frost Mortgage Lending Group for more information about a Placentia, CA home loan. 877-786-4243 x 7.
www.OCFHALoans.com
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
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