Mortgage Info - Calculators Coldwell Banker Northern California
Folsom Office

Mortgage availability and requirements are changing daily.  Because representing clients in the sale or purchase of real estate is more than a full-time job in itself, I confidently refer my clients to sources I myself would consider if I needed a loan or re-finance.  
 
Below are three highly regarded sources who may be of assistance.  I have worked with each, and trust them without question, to give my clients the best choice of options and service possible.  You can link directly to their personal web page; to return, use the 'back button' of your browser.
 
To clarify my relationship with these, or any people I might refer you to, I am not compensated in any manner from these referral sources.  Knowing that my clients might have peace-of-mind by working with anyone in my referral network is satisfaction in itself.
 
FHA Loan Requirements

With tightening of credit and lender underwriting guidelines, many buyers are turning to FHA Loans.  Among the key attractions to FHA Loans are a 3.5% down payment (effective Jan. 1, 2009), the opportunity to have seller contribution to closing costs up to 6% of the selling price and fixed rate interest rates.  FHA Loans may also be assumed by a replacement buyer, subject to qualifications and conditions.  FHA Loans were the norm some years ago but were generally replaced by conventional loans earlier this decade.

An important aspect of FHA Loans is the lengthened process of loan underwriting and approval.  Generally, if you are considering financing with an FHA Loan, it is wise to extend the escrow period to 45 days from offer acceptance.

Here is a summary of documentation necessary for an FHA Loan:

  • At least 30 days of consecutive pay stubs
  • Most recent 2 years W-2’s and document a complete 2 year history
  • Most recent 2 years Tax Returns (both personal and business)
  • Verification of income including Social Security, Retirement, Child Support, Alimony or Disability
  • 2 months consecutive asset statements that must cover a 60 day period 
2009 FHA Loan Limits

To characterize the lending market as "ever-changing" would be an understatement. Whether in the stock market or real estate market, every month seemed to hold a surprise … for better or worse. 2010 will be no different.

In March 2008, as part of the Economic Stimulus Act of 2008, the Department of Housing and Urban Development (HUD) temporarily increased its limits on Federal Housing Administration (FHA) loans. Most counties in the Sacramento area, including El Dorado, Placer and Sacramento, were considered high cost areas and the limit for a home’s mortgage was raised to $580,000. The goal of the increase was to encourage more lenders and borrowers to use FHA Loans in the tight credit market, creating economic stability in communities across the country and giving nearly 240,000 additional homeowners and home buyers a safer, more affordable mortgage alternative.

Starting January 1, 2009, the expiration date of the Stimulus Act, FHA loan limits decreased across the country. Loan limits for El Dorado, Placer, Sacramento and Yolo Counties will adust to $474,950. The lower limits are set at 115% of the median home prices in each market But despite the planned decreases, limits are still well above the $362,790 level that was in effect prior to the Stimulus Act and usually enough to buy a respectable house, condominium townhouse in most markets.

The FHA insures loans made by traditional lenders, lowering the default risk the lenders face for buyers who are not able to put down 10 or 20% when purchasing their home. FHA usually only requires about 3.5% downpayment. It is also the only government agency that operates entirely from self-generated income … costing taxpayers and the government nothing. Since its inception, FHA and HUD have insured more than 34 million mortgages and helped millions of people break into the real estate market. Last year, FHA backed about $60 billion of residential mortgages, but that number is expected to increase to $224 billion by the end of 2009.

It should be also noted that the Office of Federal Housing Enterprise Oversight (OFHEO) has approved Fannie Mae and Freddie Mac to maintain their conforming loan limit of $417,000 in 2009. This will be the fourth year in a row that the companies will be allowed to purchase mortgages at or below that rate on a national level. Anything above that amount would be considered a jumbo loan, which typically carries a higher interest rate and down payment requirement for buyers.

In higher cost areas, including El Dorado, Placer, Sacramento and Yolo Counties, the conforming loan limits have also been set as the same rate as the FHA limits listed above. For a complete list of conforming loan limits, visit http://www.efanniemae.com/.

For additional information, contact Bud Barnes, Realtor Broker Associate, Coldwell Banker Folsom CA or visit http://www.callbud.com/. 

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