Purchase Mortgage Loans

Yes, although slightly limited. Without any down payment, you’ll most likely be looking at one of two loan programs both of which have some slight limitations to be aware of. Before we dive into the nuts and bolts of each program, know this:

It only takes 3.5% down to buy a home these days.  Additionally, this 3.5% down payment can come from a gift, mom, dad, aunt, uncle, cousin, friend, or relative. This is for an FHA Mortgage.

If you’re looking for a conventional mortgage, 5% of the purchase price, 5% down payment must be your own funds. Anything above and beyond the 5% can be a gift from the same sources. If you don’t have the 5% down, a full 20% down gift would be needed.

How to buy house with no down payment

Two active loan programs will help you accomplish this goal.

VA Mortgage- must be a veteran of the US military or spouse of a veteran of the US military. You will need no down payment of any kind, but the seller of the property will have to contribute at least 2 to 3% of the purchase price to pay the closing costs that you would otherwise incur. Truly no money down, 100% financing and there is no monthly mortgage insurance requirement.

USDA Mortgage-only available in certain geographic areas. Here is a list of those areas. Income limitation- cannot earn more than $93,400 per year in combined household income. This means if one spouse is not not on the loan and the other spouse is, if the combined income together as evidenced by tax returns exceeds $93,400 the loan is in eligible for the US Department of Agriculture rural loan.

If you are not a US military veteran and want to purchase in a non-US Department of Agriculture certified area, start saving for a down payment or approach possible family members and/or friends for a down payment to purchase a home.

*The down payment to buy a home can also come from the sale of a good such as an automobile as evidenced by bill of sale. It can also come from the sales of other personal items such as household items, jewelry to name a few. Always make sure to check with your loan officer before approaching that type of direction.

Yes, this is especially useful when you’re out on the weekends with your real estate agent looking at houses and you can’t get reach your lender on the weekend. Best possible way to determine your house payment is by using an equivalent of every $100,000 borrowed

Here’s the math:

For every $100,000 in purchase price assume a monthly payment of $725 per month. Nearly everybody has an iPhone, Ipad or some portable calculator on their smart phone or tablet they could easily give them a depiction of how much payment they can take on based on a certain priced home they are considering buying.

$100,000 $725 per month

$200,000 $1450 per month

$300,000 $2175 per month

$400,000 $2900 per month

$500,000 $3625 per month

Each increment in $100,000 is equivalent to $725 per month in principle interest taxes and insurance, a worst-case scenario.

Why these home buying calculations provide the “big picture”

These calculations provide the big picture because it estimates a worst-case scenario meaning your actual mortgage payment when your lender gets back in on Monday you’ll find is probably going to be lower but for the purposes of making an offer it’s always good to play things conservatively that way you have no changes or surprises during the home buying process.

Some additional calculations to be aware of

For every $50,000 in purchase price use $362.50 half of the $725 per month figure for determining mid-purchase price ranges.

For Example house that’s $350,000 would be a monthly payment of $2537 per month. That’s using $362.50 added to $2175 per month which is computed by multiplying $725 x 3 for every $100,000 purchase price sought.

If you are thinking about buying a home in Sonoma County, or Santa Rosa California or any of the surrounding California areas, contact scott [Email address: scott@sonomacountymortgages.comscott #AT# sonomacountymortgages.com - replace #AT# with @ ], for a complete loan qualification breakdown including qualifying analysis.

Fantastic question!  Before we dive down to the nuts and bolts, consider the present market. There’s been more government regulation including a recent legal settlement heavily influencing banks to remove bank owned property from the market, clean up their books and expedite short sales (which now take 3 to 4 months).As a result, less homes are available on the market, rates have remained quite favorable, and the economy overall is feeling more optimistic about housing.

What we have is a reinvigorated housing market as evidenced by the strong upward trend in home prices driven by tenacious home buyers trying to get their offers accepted. If you’re preapproved home buyer or if you’re planning on becoming a potential home buyer for later on down the road, know that you’re going to be dealing with intense competition. Additionally, you will want to prepare yourself for the fact that you might have to make multiple offer in order to successfully get into contract. You just never know what the seller is going to say until you take action.The worst the seller can say is no right?

Why your purchase offer to buy the property despite the fact you’re preapproved, can’t seal the deal.

Two most common reasons, you need a seller credit for closing costs which weakens your offer or you’re not coming in with a strong enough offer.For example, if you’re seeing a house listed for $400,000 and you need credit for closing costs, call it 2% of the purchase price, that’s $8000 which is what the seller gives up for your benefit, thus making your offer weaker.

The more common reason however, is purchase price. Price rules in a real estate purchase offer negotiation. Everyone needs to feel like they’re walking away from the transaction with something in hand. The seller enactment net a certain amount of money from the transaction, and the buyer wants a fair price to keep his mortgage payment in line with his income and liabilities.

Tips to make your home buying efforts more successful.

•  Make an offer at the purchase price or even higher than the purchase price, at times several thousand dollars higher than the purchase price. You will want to have a conversation with your real estate agent about this.* You still have to get an appraisal, the appraisal can be a bargaining chip for reducing the purchase price to match the appraised value.
• Have your loan officer specifically put in writing on the preapproval letter, listing agent can directly contact the loan officer should they have any questions about your qualifying integrity. Typically, when you’re in the running for a home, the listing agent will call the loan officer and ask questions about our ability to qualify. While the loan officer must abide by privacy restrictions, they can however give a degree of confidence in their ability to get your loan done in 30 days to the listing agent. This is big especially when there’s multiple offers on the property.
• Include proof of funds to close with your preapproval letter, and purchase offer contract. This draws a clear line in the sand between the men and the boys whose serious and who is not. This can be accomplished by simply providing a bank statement with your purchase offer package.
• Subscribe to Zillow’s pre-foreclosure service which is free. Doing so allows you to identify foreclosures before they hit the market, as well as short sales. Once you identify these homes, have your real estate agent do the follow-up and/or watch the property for when it hits the market so you’re in first position with a strong purchase offer.
• Include a motivational letter about why you want to purchase that particular property. This can go a long way in the eyes of the seller looking to take advantage of the market and know that their property is being sold to someone who’s going to live in it, cherish it and create many happy memories in it.

The answer is nobody. Not anyone lender has a monopoly on the market. Interest rates change on a daily basis. When you hear interest rates advertised on the radio or online or you hear that interest rates drop again the information is automatically outdated. Why is this? Very simple answer-mortgage rates are tied to mortgage bonds, more specifically mortgage-backed securities (MBS).

When you take out a home loan, you are in essence creating an investment vehicle for the investor, the timely payment of that interest you are paying for the benefit of having a mortgage loan. These investors buy and sell these mortgage-backed securities every day on Wall Street driving money in and out of the bond market, thus changing mortgage rates multiple times per day everyday. Because home loans/mortgages are bought and traded every day on Wall Street just like a stock in a company is, rates move continuously. In other words when you get an interest rate quote from a home mortgage lender, that quote is only good in real time in that very instant because of the fact if you don’t lock in at that particular time, the interest rate can and likely will change again.

How Changing Rates Affects The Whole Loan Picture

How this applies when comparing rates. You call up the first lender, and they offer you a 30 year fixed rate mortgage at 3.625% at no points. You decide to continue to shop to try to get something better, you call up second under and they offer you 3.5% at no points, second lender sounds better right? As soon as you hang up the phone with the first lender, by the time you get the answer of the second under, the first lender’s interest rate could easily have changed to 3.5% at no points, thus illustrating that finding the lowest rate is borderline impossible because everybody operates off of the same mortgage-backed securities market and everyone has access to the same rates, in real time and all directly or indirectly sell their loans to Fannie Mae or Freddie Mac.

*Mortgage Tip: there is no regulation or guideline that states a lender must give you the lowest possible interest rate. The higher the interest rate, the more the lender generates in terms of additional profits off the loan you’re taking out, pure and simple.

Obviously, mortgage companies are in business to run a profit, but a fair profit, not one that is to the detriment of a consumer, but are reasonable rate given the market and the consumer’s qualifying ability. If you’re looking for the best rates for a Sonoma County home loan, start today by getting a complimentary mortgage rate quote for your purchase or refinance loan.

Question is a pretty common one, most consumers typically  compare at least 2 to 3 lenders to see who has the best combination of the lowest interest rate and lowest fee. What people are really trying to find is the lowest cost mortgage and rightfully so, taking out a home loan is a big financial decision.

You might find in lender during your comparative loan shopping that is substantially better than the other competitors. Ask yourself the question why? How is he able to offer such lower rates and fees for the exact same thing such as a 30 year fixed rate loan?

It boils down to one thing, “service”. There is the old saying you get what you pay for and you can’t expect good service at the lowest possible premium, business models conflict. You either have a reasonable rate and fee competitive with the market, with superior service (which is paramount in this type of credit market) or you can be the lowest lender in town and offer lower premium service.

It depends on what you’re looking for at the end of the day. Because interest rates change on a daily basis, even several times per day, most lenders can be pretty competitive with one another, so the real separator becomes who is more responsive? In ever changing interest rate environment the lender that is responsive, clear and transparent is the one most consumers ought to give the most weight to.

*If time is money to you, and your lender takes over 24 business hours to respond to you, ask yourself how much money is this going to cost me ultimately in loan fees and my personal time?

Few things to consider when deciding a lender and interest rate is a concern.

• How long does it take for each lender respond to you?
• How articulate are they in conveying fees in accordance with the loan you’re seeking?
• Have you worked with his previous lender before? If yes, perhaps it makes sense to go back to them if their service standard was enough to re-earn your business?
• Why specifically is your rate lower than everybody else? ? How are you able to offer such lower rates than the other competitors?
• Do you charge a rate lock fee or any other upfront fee other than the appraisal?
• How long is this interest rate lock good for? *Hint if it’s anything shorter than a thirty-day interest-rate lock, they’re intentionally quoting you interest-rate to bait and switch on you
• Does your company actually make the loan or to a farm it out to someone else? If the loan is being funded by another company and your company is the middlemen a.k.a. a broker, they have zero pool with underwriting and do not control any pricing on your loan.

At the end of the day, know that you will sacrifice service in exchange for the lowest rate in town. We successfully operate as a reasonable Santa Rosa mortgage company (a direct lender-yep we make the loan), not the bare lowest rates, but certainly not the highest rate, we can offer you competitive terms and financing on your next home loan. Get started with us today by getting a complementary rate quote and detailed spreadsheet.