A couple of years ago you could get declined for a Discover card but you could qualify for a home loan. Think for a moment about the logic because I am not exaggerating. There were hundreds of thousands of people that got into loans that they were not qualified to handle thanks to stated income mortgage, thus developing the onslaught of foreclosures and Short Sales that have come to pass. The rules of the game have changed and the difference now is that people will have to qualify and in some cases over qualify for financing. Lenders and consumers both have taken massive losses and new policy and laws have been set into motion to make sure that we never end up in a similar situation.
There are numerous reasons to learn more about 100% financing besides that fact that about 90% of it completely disappeared. For instance, you could be a first time home buyer or know someone who is looking, that could benefit from this knowledge. You could be a realtor who needs to be kept up to date with the few remaining 100% programs so you can let your clientele know about them or, you could be a mortgage lender who wants to learn more about available products so you can serve your clients in a more effective manner.
What ever your situation, I want to share some extremely valuable information that could keep you and the people you know, from wasting a ton of time and loosing a large amount of money.
100% financing in California is available through government sponsored programs. The two most common programs are called CalHFA and FHA. This article will dominantly focus on the CalHFA and FHA because they apply to the largest demographic. There are also other programs for educators and employees who work for a school district and receive salaries and if you are a U.S. Vet then the VA is a great option as well.
For First Time Home Buyers, CalHFA offers down payment assistance programs which provide a helping hand of 3% of the sales price. This has to be paid back when you sell or refinance your home and is extremely beneficial because if there is a lack of funds to close, the 3% helps to absorb the closing costs and you don’t have to pay those “absorbed” out of pocket expenses. There are different down payment assistance programs and the parameters differ upon which of them you qualify for.
Seller concessions are also important because they will absorb other closing costs as well. Seller concessions are common (especially in a buyers market) and CalHFA allows seller concessions designed as follows:
• 3% of you are borrowing 90% of the property value or more.
• 6% if you are borrowing 90% of the property value or less
Add the Seller Concession to the Down Payment Assistance and you are looking at some major help to get into your home.
FHA allows 6% Seller Concession and there are similar down payment assistance programs available (similar to that of CalHFA).
Neither CalHFA nor FHA loans are subject to the California declining market decrease of 5% because CalHFA is its own entity (separate from mainstream housing lending) and FHA loans are federally insured.
I highly suggest that if you are a First Time Home Buyer then you look at these opportunities and get a professional to pre-approve you, NOT pre-qualify you. The difference is a pre-qualification is a verbal go ahead and means nothing to a lender. A pre-Approval is a green light to go and get a house because under the approved information that you have submitted, you will be able to proceed into negotiations. A pre-approval is also a green light for an appraiser, a realtor, as well as buyers and sellers.
Experienced real estate agents who know that they are doing will have you get pre-approved before they take you out to look at homes. This gives you a clear picture of how much money you can spend and it gives your realtor a chance to do some research on the available inventory of homes so they can show you exactly what fits your needs.
For future information, there are many discussion boards, blogs, news sites, magazines and other sources of information that are available for you to review. It is always a good. My intent is to educate you so that you know that there are still opportunities out there and they are available to those who are willing to qualify for them.
If you want my FREE REPORT on “5 Reasons You Should Avoid CalHFA Loans!” please email me at Brent@brentlane.net with “CalHFA FREE REPORT!” as the subject!
I have one additional report that will help home buyers and Realtors get offers accepted in the market. “The 3 Things Every REO Offer Needs to Get Accepted by the Bank”
If you would like this FREE REPORT please email me at firstname.lastname@example.org with “REO OFFER REPORT” as the subject.
For future and archived articles go to: Mortgage News Network http://mortgagenewsnetwork.blogspot.com