House You Can Afford ▸ Home Loan Approval Process

Conventional 97 Loan Offers Low Down Payment

Sep 18 2013 Comments

Conventional 97 Loan Approval in sightIf you are looking for a low down payment mortgage option for your Long Beach home loan, look no further than the Conventional 97 loan program. This loan is still available to all U.S. residents and comes through Fannie Mae. It has simple guidelines, low mortgage insurance rates, and only a 3% down payment.

Mortgage rates are often comparable to an FHA loan, but the Conventional 97 program does not require you to pay the mortgage insurance up front and the insurance is generally cheaper. The Conventional 97 program could also be used as a refinance option for your Long Beach home loan.

The Conventional 97 program can only be used for single family dwellings, including town homes, condominiums, and detached homes. This program is capped at a loan of $417,000, so be sure to look for a home valued at $430,000 or less to maximize your benefits. Your Long Beach home loan must also be for a property that you plan to occupy. This cannot be used for investment properties, or to refinance a dwelling that used to be your primary residence, but that you are now renting out. What a great opportunity to get into a home with a small down payment, begin your search for a new Long Beach home today and contact me first, so we can get you pre-approved.

Filed Under: Home Loan Approval Process, Home Loan Closing Process, Home Loan Payments, Home Loan Programs, Home Loan Rates, Refinance Process

Expanding Your Long Beach Mortgage Options

Sep 10 2013 Comments

Dreaming of Long Beach Mortgage optionsLet me help you get into your dream home by providing you with even more Long Beach mortgage options. A recent merger between loanDepot.com and imortgage.com now provides customers, my clients, with even more options and a vast array of resources to make the mortgage process as painless as possible. By joining forces, we can rely on the expertise of nearly 700 licensed loan consultants and the resources of licenses in all fifty states. That allows me to be able to offer you a very competitive package for either a new purchase or a refinance. You will be impressed with your Long Beach mortgage options! When can we meet to go over YOUR options?

The growth of mortgage companies is vital to reviving this housing market and I’m grateful to be connected to a company that honors and stimulates growth. Since I consider all my clients as family, this merger allows me more opportunity to work hard to put together options that meet your needs as a Long Beach home borrower. I am excited to work for you to explain the whole mortgage process and give you peace of mind in your decisions. If you need competitive pricing and unparalleled servicing on your loan, I am here for you no matter the loan you need. Contact me, Ric Dizon, to help make your dreams Long Beach mortgage dreams a reality today!

Filed Under: Home Loan Approval Process, Home Loan Closing Process, Home Loan Payments, Home Loan Programs, Home Loan Rates, Refinance Process Tagged With:

Is Long Beach Home Loan Approval After Short Sales Possible?

Sep 3 2013 Comments

Long Beach home loan approval can be yoursHave you worried about getting a Long Beach home loan approval?

If you have been through a recent short sale, it may still be possible to obtain an FHA loan for a beautiful Long Beach home. If your short sale has closed on a non FHA property before the application date for the new loan, you may be eligible for a new FHA loan if you meet certain criteria. For instance, the short sale home must have been your primary residence and mortgage and installment debt payments on the previous residence must have been made within the month due for twelve months before the short sale.

In addition to these criteria, you may still obtain a Long Beach home loan if the reason for your short sale was not to take advantage of the depreciating real estate market or to buy another property in a nearby location for a reduced price. Furthermore, if you were in default at the time of the short sale, you may not have to wait for the three year requirement if documentable extenuating circumstances existed. If you experienced  an “economic event” due to employment or reduced income, you are likely eligible for a Long Beach home loan. Programs require housing counseling and proof of current steady employment and income recovery.

If you have been through a recent short sale or recent job transition and are interested in purchasing a new Long Beach home, give me a call today or spend a couple of minutes and fill out this pre-approval application. As a professional lender, I may be able to make this dream a reality sooner than you think.

Filed Under: Home Loan Approval Process, Home Loan Programs, Home Loan Rates, Refinance Process Tagged With: , , , , ,

Long Beach Condo Special Mortgage Rules

Aug 20 2013 Comments

Time to buy a Long Beach condoA Long Beach condo can be a great option for someone who doesn’t want to deal with some aspects of homeownership, such as yard work and tons of upkeep.  The value of condos took a serious blow during the downturn. and condo prices continue to fall behind single family homes.  As a Long Beach home buyer, this means that you can purchase a Long Beach condo for less than you might have thought.

However, because of special rules governing mortgages for condos, it can be harder to get bank approval.  The bank not only evaluates the buyer’s credit worthiness for a condominium mortgage, it also evaluates the condo association, and having the right mortgage lender to guide you through the process can make all the difference.

When you’re pricing a Long Beach condo, be sure to factor in condominium association fees.  These fees go to keeping up shared areas, such as the grounds and the outsides of buildings.  Sometimes the fees include homeowner’s insurance for the building itself, but not for the inside of the unit.  In that case, you’ll have to buy supplemental insurance and this will be taken into account when the bank calculates your ability to pay and be approved for a loan.

If you’re considering a Long Beach condo, one of the most important things to determine is whether the property is approved for FHA, Fannie Mae, or Freddie Mac mortgages.  If it is, there are still some special rules for condominiums.  For example, no more than 10% of units may be owned by the same entity, like a developer that found buyers for the condos.  Some of the requirements for condos can be waived if you’re willing to buy one that’s been foreclosed, however.

Be sure to educate yourself on the special rules for getting a mortgage for a Long Beach condo, or better yet, call me to get expert advice.  Weigh the pros and cons with your needs and lifestyle.  You can also apply online here in minutes to get pre-approved and start your path towards Long Beach condo ownership.

Filed Under: Home Loan Approval Process, Home Loan Closing Process, Home Loan Payments, Home Loan Programs, Home Loan Rates

A Financial Advisor Coaches Toward The House You Can Afford

May 7 2013 Comments

Financial Advisor Helps You Get the House You Can AffordWorking with a financial advisor can be very helpful when you are starting the process of buying a house you can afford. Accuracy, details, and accountability are extremely important and beneficial to you and your loan officer as you try to gauge where you are at in the home buying process.

Often times I hear that people avoid financial advisors (or financial planners) because they are embarrassed or afraid. I want to introduce you to a local friend of mine who can help you understand your finances and get you closer to the house you can afford. Her name is Jennifer Fontanilla and you can reach her via email or at 714.798.3392. Mention my name and you’ll even get a free financial consultation.

Jennifer will help you navigate through the often muddy financial waters and help you determine savings goals and cash flow along with insurance and retirement needs, as well as help you envision your plan of finding a house you can afford. Her goal is to create financial success for you, as your personal advisor. Trust me, you’ll like doing business with her and she’ll get your finances in order so you may be able to buy the house you can afford much sooner than your expected!

Filed Under: Community News, Home Loan Approval Process, Refinance Process Tagged With: , , ,

10 Ways to Reduce Stress and Increase Loan Approval For the House You Can Afford

Apr 25 2013 Comments

Increase Loan Approval with Ric DizonWhen it comes to getting a home loan for the house you can afford, we all expect to have some obstacles. However, when you work with me, Ric Dizon, I make it as easy as possible. That’s just part of who I am and how I operate and honestly, I really DO want you to find the perfect rate for a house you can afford, so I do all I can to make it happen and increase your loan approval.

Top 10 Ways I Reduce Stress and Increase Loan Approval Rates?

1.  I ask you to fill out an EASY application (under 5 minutes) once.
2.  I evaluate all loan products and am a one-stop source for funding, whether you are refinancing or buying a new home.
3.  I assess your individual situation and recommend what’s best for you.
4.  I call and email you back (within 12 hours) and will answer your questions accurately.
5.  I am honest with you about your rates, fees, points and options. If I know a better program I will share it with you.
6.  I believe in solid timeframes. When I say your loan will fund, I mean it.
7.  I share my valued network of industry professionals with you if additional counseling is needed.
8.  I respect your comfort level – your security and savings are my goal. I listen to your needs and wants and determine ways to achieve them.
9.  I know the local community and LOVE Long Beach and can even help you in your Long Beach home search!
10.  I can refer you to other resources throughout the community and keep you posted on events even AFTER you have purchased the house you can afford.

Take a few minutes and fill out this home loan application now and you will be on your way to your house you can afford!

Filed Under: Home Loan Approval Process, Home Loan Closing Process, Home Loan Payments, Home Loan Programs, Home Loan Rates, Refinance Process Tagged With: , , , , , , , , , , , ,

How to Calculate Your Mortgage Limit

Apr 16 2013 Comments

How to Calculate Your Mortgage LimitLong Beach home buyers ask a few common and frequent questions. Among these is the ubiquitous “What is my mortgage limit?”. To know how much mortgage you can afford when you are going in for a new house, you need to know that there is no fixed answer. The answer depends on the method used by your mortgage lender to calculate your mortgage limit.

There is no fixed regulation stipulating the size of the house you can buy, or the amount of your mortgage. The reason for this is that your mortgage lender will calculate your mortgage limit differently from how you would do it. Here, we will take a look at both the approaches to calculating your mortgage limit.

The Mortgage Lender’s Method – DTI to Calculate Maximum Purchase Price

The maximum purchase price calculated by a mortgage lender does not really consider the potential home’s purchase price. Instead, the mortgage lender takes into consideration the amount of mortgage loan required by the home buyer and the prevailing mortgage rates. He uses these figures to calculate the expected mortgage payment every month. This figure is compared with the monthly income of the buyer.

This method of comparison is called the Debt-to-Income Ratio. It is abbreviated as DTI and this ratio consists of two components.

Front-End Ratio of DTI

The front-end ratio of DTI is the first component of Debt-to-Income. This is a comparison of the monthly mortgage payment to be made with the monthly income of the buyer. The monthly housing payment includes the following compulsory obligations:

  • Association dues to be paid every month
  • Monthly insurance to be paid by homeowners
  • Monthly taxes of real estate to be paid
  • Monthly interest payments and principal

The front-end ratio has no maximum limit. However, mortgage lenders are likely to prefer no more than 36% of front-end DTI. That is, a buyer should have to allocate only up to 36% of his or her monthly income towards housing payments.

Back-End Ratio of DTI

The back-end ratio is the second component of DTI. This ratio pits the buyer’s monthly income against not only the monthly housing payments, but all payments that the buyer needs to make.

These might include all or more of the following obligations that the buyer has to undertake every month:

  • The minimum monthly credit card payments
  • The housing payments per month
  • In case of car loans or lease, the monthly payments towards the car
  • Child support per month
  • Monthly installments of loan payments

Banks prefer to see 43% or less as the back-end ratio. However, this does not mean that your mortgage application will automatically be disqualified if you have a DTI exceeding 36%. You can also find lenders who accept up to 45% DTI ratio and higher for FHA loans, even up to 55%.

Creating a Monthly Budget for the Household

Home buyers can leave the onus on the bank to determine the maximum home they can afford. However, they can also calculate this on their own.

The bank can tell you the maximum you can afford with respect to your income. However, your other priorities also determine how much you are willing to spend on your housing payments.

By creating a monthly budget and laying out your priorities, you can come up with the maximum amount you are willing to spend on your mortgage. By calculating backward from this amount you can zero in on the maximum loan you are willing to take on your home.

Today, if you are eyeing Long Beach real estate, and haven’t purchased — there are still good bargains out there. Give me a call, 562-257-5008 and let’s arrange for you to see how much house you can afford right now!

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What 7 Things Long Beach First Time Homebuyers Aren’t Told

Mar 26 2013 Comments

What 7 Things Long Beach First Time Homebuyers Aren't ToldFirst time homebuyers in Long Beach are told many things –

“Save your money,” of course, parents advise.

“Location, location, location!” their friend’s friend or friend of a realtor.

Reasonable advice, absolutely. But there some important steps of the home buying process which typical Long Beach first time homebuyers doen’t usually hear. In no particular order, I’ve listed 7 of the most important ones:

1.  Mortgage Rates You See Advertised Aren’t Usually What You Get

The banner ads are everywhere online: “3.2% rates!” “No money down!” But the truth is, mortgage rates vary greatly and sometimes day to day. The only way you’ll know what rates you actually qualify for is to go through a complete homebuyer assessment including credit pulls and income verification. Another point to consider: online mortgage calculators, while handy, can be deceptive if you do not factor in the real cost of tax, insurance and PMI when you’re looking at an FHA-loan.

2.  Every Tiny Bit of Debt Counts

Think that $1400 left on your Visa isn’t going to matter? Think again. Every bit of debt weighs in when your credit is scored. What many Long Beach first time homebuyers aren’t told is that when you apply for a mortgage, nearly every element of your financial history is going to be analyzed with a fine-toothed comb. All debt will be factored in as the bank figures out how much it is willing to lend. Standards have stiffened, so the earlier you dispose of even small issues, the better.

3.  Your Choice of Agent Makes All the Difference

Let me guess: your friend’s friend also has an agent to recommend (she carpools with his sister’s next door neighbor). There’s no reason you shouldn’t interview her: maybe that’s the right fit for you. But without a solid personal referral, don’t just sign up with the first agent you find: this is a working relationship that can shape your family’s future. Your agent’s connections, experience, and market knowledge will be key — and can well make the difference between your writing an offer that gets accepted or not.

4.  Remodeling Costs More Than You Think

You’ve found a fixer: your energy is to be applauded. But before you write that offer, if you are one of our Long Beach first-time homebuyers, be certain to have penciled out the bottom line cost of bringing the home up to the standard you want to be move-in ready. You may well be able to live with some items that you will fix over time, but in all areas, budget 20% more than your estimate.

5.  What Matters is What the Bank’s Appraiser Thinks the House is Worth

Getting a loan approved isn’t as simple as having great credit and a down payment. Your offer also has to pass the bank’s approval process before they will okay the loan.

6.  Getting inspected doesn’t mean there won’t be problems

Should you skip the inspection process? Of course not. You need to know if the home is structurally sound. But owning a home involves continuing expenses — and problems can pop up even on the first day of ownership. Set aside funds to be on the safe side.

7.  Buying Your First House Can be Stressful…Really Stressful!

One of the absolute best pieces of advice I can give is to relax — expect the unexpected! Buying your first house is scary only if you allow it to be. Since it is all but certain that there will be a peeks and valleys, allow the possibility that may not get any particular house. Veteran homebuyers come to understand the cost of overly emotional involvement — when you do, too, you will be better able to roll with the punches…and to make financially sound decisions.

If you would like to talk story about any of these item in my list, get in touch with me – or just call me at 562-257-5008! I’ll fill you in on everything Long Beach first time homebuyers need to know.

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Improving Eligibility for a Mortgage Loan – The Magic Triangle

Mar 19 2013 Comments

Improving_Eligibility_for_a_Mortgage_LoanMortgage lending and getting approved for mortgage loans is no easy task these days.  Determining eligibility for a mortgage loan, home buyers are finding it increasingly difficult to get mortgage loan approval. With the increased amount of federal regulation and the wariness of banks and borrowers, getting approved for mortgage is a heavy duty task and a may be a challenging process.

However, if you want to know your eligibility for a mortgage loan, you can check with the Magic Triangle. This triangle considers income, credit and equity to determine whether you are eligible for a mortgage loan.

The three biggest factors affecting mortgage approval are income, credit and equity. If you can satisfactorily show these three factors, you can get a mortgage loan approval. These three factors constitute the magic triangle. If all three are adequate, your “bull’s eye” should fit within the three edges of the triangle.

Income consists of your DTI, or household debt in a month in comparison with your monthly income that is taxable. Equity consists of the equity percentage in your house. Credit is the middle score reported by TransUnion, Equifax and Experian.

When all these three factors are satisfactorily met by the borrower, the circle at the middle of the triangle fits within the three edges of the triangle, which signals a mortgage approval. If you are lacking somewhere, the circle will break through the edge of the triangle, signalling a disqualification. These three factors are thus, the most important factors when it comes finding eligibility for a mortgage loan and getting a mortgage approval.

Compensating Factors and Eligibility for a Mortgage Loan

According to the above posited theory, every ideal applicant would have a high income, amazing credit and big equity. However, there are very few people that would fit all the criteria. In reality, there is something called “compensating factors” that allow applicants to be eligible for mortgage loans as long as they fulfill at least two of the criteria very well.

In other words, compensating factors are strengths in a home buyer’s application that help to balance out the weaknesses.

An example is an individual who has low income but outstanding credit and lots of equity still stands a good chance of mortgage approval.

These compensating factors can only be income, equity and credit. Thus, a factor such as “employment history” is not less likely to count as a compensating factor, but still helpful. As a result, many applicants will find that they have very few legitimate compensating factors. Without these factors, it is a lot tougher to get approved for mortgage.

If the applicant has a low income but normal credit history and not much of equity, it is likely that the applicant will be turned down.

Compensating factors are not official criteria for a mortgage approval. If you do not fit the official mortgage approval criteria but think that you should be approved for mortgage anyway, consider applying for a mortgage loan at any rate. Chances are that your compensating factors will get you a mortgage loan approval in spite of the official guidelines.

To get a mortgage approval for your upcoming home purchase or refinance, call me at 562-257-5008 or click here for an online rate quote. The rate quote will start the process.

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Mortgage Approval: Gifts for Down Payment and Closing Costs

Mar 4 2013 3 Comments

Down Payment gifts are quite a natural trend among the home buyers. These home buyers can be either first tome, or these can even be recurrent home buyers. There are several down payment assistance programs meant for the home buyers who are other otherwise cleared for the home loan, but do not have the capability to make the down payments as well as closing costs for making the purchase complete. Statistics have clearly shown that Move–up Buyers as well as Home Buyers having Jumbo Loans running on them go for the cash gifts as closing costs. It is not easy to buy the home. Just get in the wrong direction, and watch the bank authorities plainly turning down the mortgage loan in an underwriting.

In the event where the mortgage loans were disbursed between 2005 and 2009, default rate of interests on low-down payment loans where “Downpayment Gifts” were included, showed an increase than  low-down payment loans where “Downpayment Gifts” were not involved.  However, in the current scenario, many banks are asking the home buyers to show their funds before they ask for closing.

“Downpayment Gifts” Show Substantial IncreaseGift for Downpayment and closing Costs

What is the amount of DownPayment which can be asked as gift? The amount taken as gift for making Down Payments by the home buyer doesn’t cross the overwhelming mark. US Federal government has come up with several beneficial loan programs. The percentage of DownPayment requirements remain well within control as given below:

FHA Mortgage: Minimum 3.5% down payment

VA Home Loan: 0% down payment

USDA Rural Mortgage Program: 0% down payment

Fannie Mae HomePath: 3% down payment

There are plenty of options available in the category of low- and no-down payment mortgages. However, several home buyers prefer the conventional loans awarded through the means of Fannie Mae and Freddie Mac.

A conventional loan is categorized by the very size of mortgage loan as well as the amount of down payment. In general, the size of mortgage loan is set around $417,000 or even less excluding the high-cost areas like Palo Alto, California and Hawaii where the size of loan can swell to $625,500 and above all, down payments seem to be typically 10% or higher. The reason why conventional mortgage home loans have shown an increase in the popularity charts is because of three prominent reasons. The first reason is that conventional mortgages offer ideal combination of low mortgage rates, second reason is that these loans provide low closing costs and the third reason is many of these loan have no mortgage insurance.  With conventional mortgages, the situation where mortgage loans are below 20% down rate of interest, the insurance will become quite cheaper for the home buyer, rather than opting for FHA loan.

During the time of acceptance of down payment gifts, make sure that you follow ethical way. There are good and bad ways of taking the gifts, and therefore, you need to make a well balanced and informed choice.

When you receive a  gift for a down payment to buy the home, you should follow the stringent 3-step process. Fannie Mae, Freddie Mac, FHA, VA, or the USDA – all of them take into account same process.

  • The first step involves writing the mortgage Downpayment gift letter, which should include the relevant information such as total gift amount, property address of subject, the association of the donor to the borrower and the promissory note that the gift is actually a gift and not a loan.
  • The second step involves adherence to Mortgage Downpayment Gift Guidelines. You have to be sure that no rules and regulations have been violated while accepting the gift from donor.  It is important for the donor to keep the track of the source and funding of the money being gifted.
  • The third step is preparing the check of the amount as made known in the gift letter. Take a photocopy of check for your record purpose, and provide another copy to the donor.  Make sure that you do not wire the funds as it is easy to keep the track the checks.

Keep Record of Tax Notes on Gifts for Downpayment

Keep in your mind that you cannot evade the federal taxes, irrespective of the fact whether you are donor or recipient of cash gift for down payment. There are legal liabilities associated with it too. Check with your tax preparer or CPA and find the latest rules in gifts for down payment.

Want to take the first step in figuring out how much house you can afford? You need to get approved.

 

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