Mortgage Loans in Sacramento

With today’s combination of lower home prices, some of the lowest interest rates the industry has ever offered, and the $8,000 tax incentive for first-time buyers, buying a home has never been so attractive. The only real hurdle left for many mortgage loans in sacramento is coming up with a down payment. With this in mind, we’ve put together some of the most frequently asked questions we get about down payments in today’s market.

Q. Are there any no-down payment programs left?

Yes. While it’s true that most of the popular no-down payment mortgage loans in Sacramento  disappeared in the wake of the subprime mortgage collapse, there are still two longstanding government-backed programs that offer mortgages with no down payment: the USDA Rural Development Program and the VA Loan Program.

 
A USDA Guaranteed Loan is a government-insured, 100% purchase loan. This means there is no down payment required if you – and the house you intend to buy – qualify for the program. Not all areas qualify, but you’d be surprised at how many neighborhoods in your area do. There are income and other limitations, but if coming up with a down payment is challenging, you might want to consider this program.

If you or your spouse is a military veteran, you may qualify for a 100% financed mortgage loan in Sacramento from the US Department of Veterans Affairs. More than 29 million veterans and service personnel qualify for this service benefit. Give us a call to find out if you’re one of them.

Q. May I use a gift from family members as part of my down payment?

Yes. In many cases, immediate family can provide monetary gifts to be used as a down payment. There are restrictions of course, and strict documentation will be required, but we will gladly walk you through the finer details of this process. Be sure to mention this option when you’re filling out an application with us.

For more any questions reagrding mortgage loans in Sacramento, please call us at 916-871-8207 or send an email to ryan.jones@equityplusfinancial.biz.

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Private Mortgage Insurance (PMI) is required by most lenders when a borrower puts less than 20% down on a mortgage loans in Sacramento. Paid for by the borrower, PMI not only protects the lender from foreclosure, it also enables many buyers to qualify for loans and purchase real estate when they couldn’t have otherwise. On January 1st, 2007, legislation went into effect making PMI tax deductible for new borrowers whose personal adjusted gross income is $100,000 or less. This has created additional opportunities for many buyers to finance a more expensive home or, in some cases, to obtain a lower monthly payment, while reducing annual income taxes.

An alternative financing option that borrowers may also consider involves taking out two home loans concurrently. The second loan, commonly referred to as a “piggyback loan”, can take the form of a traditional home loan or a Home Equity Line of Credit (HELOC). It supplements the borrower’s funds to help them achieve a 20% down payment, eliminating the need for PMI. However, in most mortgage loans in Sacramento PMI can be cancelled once the accumulated equity has reached 20% of the home’s value, while a second home loan will have to be paid back in full regardless. Factor in the new PMI tax benefit, and a borrower’s monthly payment may actually be lower with PMI versus a piggyback loan scenario.

Choosing PMI is not a one-size-fits-all decision. It is my job to weigh my borrowers’ long-term goals and to provide comprehensive solutions that clearly explain all of the pros and cons of  mortgage loans in Sacramento option. It’s a job I take very seriously.

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One of the many mortgage loans options in Sacramento is the Federal Housing Administration (FHA) program. It first began in 1934 in an effort to encourage home ownership despite the difficult economic times of the era. The program enables consumers who may not qualify for a standard loan to obtain the financing they need to purchase a home without income limitations.

FHA loans differ from typical mortgage loans in Sacramento in that they are insured by the Federal Housing Administration, which is a part of the Department of Housing and Urban Development (HUD). Because this insurance reduces the lender’s risk on the loan, lenders have greater flexibility with regard to approving loans. For example, FHA mortgage loans in Sacramento are not credit-score driven, so a client may be able to obtain a loan despite having had credit problems or even a bankruptcy in the past. Alternatively, if a consumer does not have a traditional credit history, it is still possible to obtain financing by documenting payment histories on items such as rent and utilities.

FHA loans also provide added flexibility when it comes to closing costs and the down payment. Many of the closing costs can be incorporated into the loan, and a down payment of less than 3.5% of the purchase price is required. The down payment may be obtained as a gift from a family member or through a down-payment assistance program. FHA mortgage loans in Sacramento are processed just like any other loan, and they provide a wonderful opportunity for consumers who are seeking to achieve home ownership!

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Subprime mortgage loans in Sacramento have now been credited for bankrupting well over 110 lenders and seriously damaging operations at many major mortgage firms. They’ve reportedly wiped out 5 hedge funds, tens of thousands of jobs, and have led to millions of foreclosures with millions more on the way. And, as if that weren’t enough, subprime mortgages are also blamed for massive volatility in the stock, bond, credit, futures, and real estate markets here in the US and around the globe. Some say losses in the mortgage securities market alone could reach hundreds of billions of dollars this year.

This means that, for any Americans looking to buy, sell, or refinance a home, they are confronting a very different market from the one that existed just 6-12 months ago.

How did this happen?
The recent real estate boom was fueled by a period of record home appreciation and historically low interest rates. Banks, in order to compete, loosened guidelines and began offering more funding to more borrowers through riskier, non-conforming or “exotic” mortgage loans in Sacramento.

What does this mean to you and mortgage loans in Sacramento?

Sellers: If you’re planning on selling your home, be prepared for an even smaller pool of qualified buyers. While some experts predict a settling of this credit crisis over the coming year, tightened credit guidelines and diminishing mortgage products could knock out as many as 15%-30% of potential qualified buyers.

Buyers: Get pre-approved by your mortgage professional. While there are a lot of great deals out there, getting credit is becoming tougher and tougher, and it’s taking longer and longer to complete a transaction.

Borrowers with less-than-perfect credit:  While it might be challenging, borrowers with credit issues need to see a loan expert. Often they have credit repair resources and other strategies to help you reach your financial goals.

Finally, there’s an important concept to embrace: all markets, while cyclical in nature, are self-correcting, be it credit, real estate, stocks, or bonds. For the last 6 or 7 years, real estate was booming and riding high. The correction we’re experiencing now – while it seems harsh and could get much worse – is, in a sense, “natural” and directly related to the extremely loose guidelines and perhaps overzealous lending of mortgage loans in Sacramento and leveraging during the boom cycle.

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What impact does the Stimulus Package have on mortgage loans in Sacramento?

The Economic Stimulus Act of 2008 is a $168 billion plan intended to jumpstart the sliding U.S. economy. The new bill is designed to help certain ‘high-cost regions’ of the struggling housing market by

1) Temporarily increasing the ‘conforming loan limit’ from $417,000 to as high as $729,750 in specified areas; and

      2) Temporarily increasing the size of loans the Federal Housing Administration

      (FHA) can insure from $362,000 to as high as $729,750 in specified areas.”

What do these new provisions mean for mortgage loans in Sacramento?

For those looking to purchase or refinance real estate in a ‘high-cost region,’ this is great news. These temporary increases could help consumers avoid the higher interest rates associated with ‘non-conforming’ or jumbo, loans – which are currently more than a point higher than rates on conforming loans. This means more consumers will be able to take advantage of great real estate deals and get more home for less money. In fact, many homes that some borrowers could not afford just a few years ago could now be within reach, thanks to this temporary government program.

The Stimulus Package is also very good news for homeowners looking to refinance out of their expensive jumbo loan and into a new ‘conforming loan.’ While the legislation limits new mortgage contracts to 2008, it does not exclude the refinancing of any past mortgages. This means that, if borrowers qualify, they can take advantage of the new conforming loan limits no matter how many years have passed since they obtained their mortgage – as long as they get it done before the end of 2008.”

How is a high-cost region determined? And do most mortgage loans in Sacramento qualify as one?

A high-cost region is typically determined by the median value of its homes. The median value is the specific price that is halfway between the least expensive and most expensive home sold in an area over a given period of time. Not to be confused with the average home price, the median home price is the price at which half of all buyers bought more expensive homes and half of all buyers bought less expensive homes. If that sounds confusing, don’t worry. It is the responsibility of the Department of Housing and Urban Development (HUD) to determine and publish what the median home price is for regions across the country. I can easily access and interpret these figures for mortgage loans in Sacramento, and help calculate the new conforming and/or FHA loan limits within minutes.

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