Most condo projects in Placentia that are approved for FHA financing are going to need recertification after December 7, 2010. That is the date that any condo projects that haven’t been newly approved in 2010 will need to either be recertified and fully approved.

Condo FHA Recertification or Full Approval- Which is it?

If the condo project was initially approved prior to January 1, 2000, then a full project approval is required. If the condo project was initially approved on or after January 1, 2000, then the project is eligible for the recertification process. Projects may be recertified beginning 6 months prior to the approval expiration or within 6 months after the approval expiration date. If the project is not recertified within 6 months of the expiration date, then the project will need to be fully approved by FHA.

Why FHA Approval is Important for Condo Projects in Placentia, CA

FHA financing is the primary loan type for first time home buyers in Placentia. FHA only requires 3.5% down payment, and qualifying is flexible compared to most other types of financing. Quite often first time buyers are in the market for a condominium. But not all Placentia condo projects are FHA approved. As a matter of fact, quite a few are not. The condo projects that are FHA approved have a much better chance of maintaining a higher sales value since more Placentia home buyers are able to get financing to purchase these homes. Maintaining FHA (and VA) project approval is important if a condo project is to maintain property values.

How to Recertify an Placentia Condo Project

The recertification package may be submitted by a Placentia FHA Lender, builder/developer, Homeowners Association, Management Company or Attorney or Project Consultant who submits on behalf of one of the previously mentioned parties. Recertification packages cannot be submitted by borrowers, sellers, and/or real estate agents. The easiest way is to have the Condo Management Company proactively submit the package rather than wait until FHA Recertification is needed to close a transaction. Click the link to see the Orange County Condo Recertification Checklist.

Authored by Tim Storm, an Placentia, CA  FHA Loan Officer – Please contact my office at Trust One Mortgage Corporation for more information about an 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. 877.786.4243 x 7 | tstorm (at) ochomebuyerloans.com *Trust One Mortgage Corporation is licensed and supervised by the California Department of Real Estate (“DRE”), License # 01087829

FHA typically requires a two year employment history, but job gaps are not an automatic deal killer. FHA guidelines are actually fairly flexible regarding job gaps. The job gap will need to be documented and certain conditions need to be met, but don’t let a job gap keep you from buying a home.

Placentia, CA FHA Borrowers Returning to Work After Job Gap

An Placentia FHA borrowers income may be considered effective and stable when recently returning to work after an extended absence if he or she

• is employed in the current job for six months or longer, and
• can document a two year work history prior to an absence from employment using a lender issued Verification of Employment or copies of W2′s or paystubs.

An extended absence is considered to be more than six months. A Placentia FHA borrower may have been out of work a year, and if they’re able to verify a two year work history prior to the beginning of their “gap”, and have been on the new job for six months, they are ready to go.

Reasons for Job Gap

There are many reasons why someone may have been out of work for more than six months. For example, an acceptable situation includes individuals who took several years off from employment to raise children and then returned to the work force. Of course, lately is has not been unusual for a borrower to be laid off and then take several months or even more than a year to find a new job.

After a gap, it will be difficult to use income received beyond the “base” income. FHA underwriters typically need to see a 24 months average of overtime, bonuses, or commission income in order to use the additional income in calculating the debt to income ratios.

The first step in an Placentia FHA borrowers should take in the home buying process is talk with an experienced Placentia FHA Direct Loan Officer.  An experienced FHA loan officer should be able to quickly answer questions and help in getting the Placentia home buyer PreApproved for an FHA loan.

Authored by Tim Storm, an Placentia, CA Loan Officer with 20 year experience– Please contact my office at Trust One Mortgage Corporation for more information about an Orange County, 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.

877.786.4243 x 7 | tstorm (at) ochomebuyerloans.com

*Trust One Mortgage Corporation is licensed and supervised by the California Department of Real Estate (“DRE”), License # 01087829

The source of a down payment is very important for First Time Buyers purchasing a home in Placentia, CA. It is actually very important for any type of mortgage in 2010. Lenders want to make sure the down payment is not borrowed, especially from a credit card.

Providing proper asset documentation and the actual source of the funds is a critical element in the loan closing process. Being aware of what sources are allowable can provide a home buying opportunity to a Placentia First Time Buyer. Almost more important is to know what sources are not allowed.

The seasoning of funds is just as important as the source. Lenders will ask for 2 months most recent bank statements in order to verify the “seasoning” of funds to close. And not just the front page of the bank statement. The lender will want to see all pages to make sure there hasn’t been a large deposit in the previous 60 days that needs explaining.

Below are Acceptable Sources of Funds for a Placentia FHA Home Buyer

1. Bank accounts, which could include checking, savings and money market
2. Investments accounts you may have, such as stocks, bonds or certificates of deposit
3. Retirement Funds – Some 401K may allow you to borrow against it for your down payment. A cool thing about FHA financing is the 401K loan payment is not included in the overall debt to income ratios.
4. Cash value and face amount of life insurance policies
5. Value of significant pieces of personal property, including automobiles. Note: Providing documentation of ownership will be required.
6. Gifts – Family members can support your cash requirements since no repayment is required.
7. Inheritance/Trust Funds – Inherited or trust fund money is also an acceptable source of funds since there is no repayment.
8. Government Grants – Many state, county and city agencies will offer an ary of down payment assistance programs.

FAQ Regarding Funds to Close an FHA Loan in Placentia

Q: Suppose I do not have a bank account and cannot properly source my cash to close?
A: Cash on hand is still an acceptable source of funds for some loan programs, however this is probably the most difficult and time hungry source.

Q: Can I use a bonus from my employer for my down payment?
A: Yes, but this needs to be a bonus you regularly receive, although other scenarios may be presented on some loan programs.

Q: Can I borrow the money from a friend?
A: No, any money that needs to be repaid is typically a poor source of funds.

The first step in the home buyer process is to talk to a lender. Finding a local Placentia loan officer who is an expert in FHA and VA financing is important. The loan officer should be able to provide loan scenarios which will show you a purchase price, loan amount, payment, and estimate of closing costs based on your goals and qualifications.

Authored by Tim Storm, a Placentia, CA Loan Officer – Please contact my office at Trust One Mortgage  for more information about a Placentia, CA home loan.  877-786-4243 x 7.

www.OCFHALoans.com

Contact me for your Placentia 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

*Trust One Mortgage Corporation is licensed and supervised by the California Department of Real Estate (“DRE”), License # 01087829

FHA will be the loan of choice for most Placentia home buyers in 2010. In 2009, over 30% of all loans were FHA. The rest were a combination of cash buyers, Orange County VA home buyers, Fannie Mae and Freddie Mac. There are several reason why 2010 will be another big year for the FHA program.

Reasons Why FHA is Better for Most Placentia Home Buyers

1. FHA only requires a 3.5% down payment. Realistically, any buyers with less than 20% down would most likely go with FHA, unless they qualified for the VA loan program, which is $0 down. Also, some properties which are being sold by Fannie Mae qualify for the Fannie Mae HomePath Mortgage Program, which has no Mortgage Insurance, No Appraisal, and only requires 5% down.
2. FHA is more flexible with credit scoring. This is not to say that FHA is “the next subprime”, but most Orange County FHA lenders will allow FICO scores as low as 620, even with only 2.5% down payment. While VA is also flexible with FICO scoring, even the Fannie Mae HomePath program requires a 660 for 95% financing. With normal Conventional Fannie Mae financing, having a score below 660 will have a dramatically bad effect on the borrowers interest rate. FHA does not have the same “pricing hits” for low FICO that Fannie Mae and Freddie Mac have. The result is that someone even putting even 20% down but with a 620 FICO score, would potentially have a higher interest than someone putting 3.5% down in an FHA loan with the same 620 FICO score.
3. FHA is more flexible with the use of “non-occupying” co-borrowers. There are situations where a self employed home buyer may not be showing enough income on their tax returns to qualify for a mortgage. If they have a relative who has low debt to income ratios, the relative could help the buyer get qualified for the loan.

FHA is not just for Placentia First Time Home Buyers. FHA can also be used by previous or move up home buyers. This is very helpful for those home sellers who have lost equity in their homes who still want to buy another home.

Placentia First Time Home Buyers have until April 30, 2010 to get a signed contract so they can qualify for the $8,000 First Time Buyers Tax Credit. Now is the time to begin the process. The first step is to call a Placentia FHA Loan Expert who can help buyers through the financing stage of the home buying process. Finding out how much of a loan you qualify for is a very important first step. Once PreApproved for a mortgage, you will be able to confidently begin the home search.

Authored by Tim Storm, a Placentia, CA Loan Officer – Please contact my office at Trust One Mortgage  for more information about a Placentia, CA home loan.  877-786-4243 x 7.

www.OCFHALoans.com

Contact me for your Placentia 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

*Trust One Mortgage Corporation is licensed and supervised by the California Department of Real Estate (“DRE”), License # 01087829

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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 Trust One 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:

• Amount of mortgage loan amount
• Orange County, CA and Placentia FHA lending limits
• Borrower’s income, employment and other personal documentation
• Borrowers credit worthiness
• Borrowers initial down payment and funds to close
• 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 Trust One Mortgage  for more information about a Placentia, CA home loan.  877-786-4243 x 7.

www.OCFHALoans.com

Contact me for your Placentia 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

*Trust One Mortgage Corporation is licensed and supervised by the California Department of Real Estate (“DRE”), License # 01087829

The FHA ”High Balance” loan program, which is any Placentia FHA loan between $417,000 and $729,750, is becoming a popular program for  Placentia First Time Buyers. Placentia home buyers with solid, documentable, income, are able to purchase their first home for as much as $755,000 with only 3.5% down payment. FHA is not limited to first time buyers and has no income limitations.

FHA in Placentia, CA is Popular Again!

FHA has been around for a long time. But when property values began to rapidly increase, the FHA loan limits were too low to actually buy anything in Placentia. While the average home price in Orange County was over $500,000, the maximum FHA loan amount was only $362,790. Buyers were financing their home purchases with $0 down “80-20″ subprime loan programs. But those programs are gone and home prices have dropped. At the same time, in order to help stimulate the real estate market, HUD raised the FHA loan limits. Now, FHA is the only way to buy a home with a small down payment, unless you are eligible for a VA loan. VA allows 100% financing in Orange County up to a loan purchase price of $737,500.

How do I find out how much I qualify for?

Before looking for a home, the first step is to get PreQualified for an FHA loan. A Loan Officer who is an Placentia FHA loan expert can prepare custom loan scenarios based on your income and debt qualification, along with your payment comfort level and long term financial goals in mind. The next step is to get PreApproved. PreApproval is where your income, assets, and credit are reviewed. Below are the items which are needed for an FHA Loan PreApproval.

• 2 years tax returns, all schedules.
• 2 years W2′s or 1099′s
• Paystubs for the most recent 30 days.
• Bank statements for the most recent 2 months, all pages.
• Copy of drivers license and social security card.

Authored by Tim Storm, a Placentia, CA Loan Officer – Please contact my office at Trust One Mortgage  for more information about a Placentia, CA home loan.  877-786-4243 x 7.

www.OCFHALoans.com

Contact me for your Placentia 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

*Trust One Mortgage Corporation is licensed and supervised by the California Department of Real Estate (“DRE”), License # 01087829

Home buyers in Placentia, CA have quickly found that FHA financing is a great way to purchase a home.  FHA only requires 3.5% down payment and also has low fixed mortgage rates.

Why Are Placentia Home Buyers Choosing FHA Financing Over Conventional Financing?

Conventional financing requires a minimum of 10% down. Realistically, if you are looking to buy a house with anything less than 20% down, FHA will most likely be the way to go. Even if you want to go with a Conventional loan at 10% or 15% down, you will still need Private Mortgage Insurance, which is not an easy thing to get in the current lender environment. PMI insures the lender in the case of default. It is required on a Conventional loan with less than a 20% down payment. FHA automatically has Monthly Mortgage Insurance as part of it program, meaning that once you are approved for an FHA loan, there is no secondary approval required for the insurance.

Placentia Home Buyers Can Go $0 Down with VA Financing

Of course, you need to be eligible for a VA loan. But for those that are, $0 down cannot be beat. Also, VA does not have a Monthly Mortgage Insurance, which helps to keep the payment low. VA also offers low 30 year fixed rates.

The First Step a Placentia Home Buyer Should Take

Before looking for a home, the first thing a Placentia home buyer needs to do is talk to a local Orange County Direct Mortgage Lender. It helps to talk to someone who knows and understands FHA and VA financing. Your lender should be able to quickly prepare loan scenarios specific to your situation. The next step is to get prequalified and preapproved for a mortgage. Sellers will not even accept an offer from a buyer who hasn’t been at least prequalified from a Direct Lender.

Placentia Real Estate has a lot to Offer!

The city of Placentia, CA has a lot to offer. While home prices are lower and more affordable than they’ve been in many years, real estate has stabilized. Values have come down to levels that are affordable. Homes are not sitting on the market for very long, as buyers are finding out. Most reasonably priced homes are receiving multiple offers. In order to make sure your offer is “in the running” it is important that all your financing questions be answered.

Authored by Tim Storm, a Placentia, CA Loan Officer – Please contact my office at Trust One Mortgage  for more information about a Placentia, CA home loan.  877-786-4243 x 7.

www.OCFHALoans.com

Contact me for your Placentia 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

*Trust One Mortgage Corporation is licensed and supervised by the California Department of Real Estate (“DRE”), License # 01087829