Home Loans and Mortgages

Home Loan Tools and Information for Buyers

My home loan and mortgage resource page is a complete information resource for home buyers.

Mortgage Calculator

This online mortgage calculator can assist you in working some preliminary numbers on a home loan qualification. Please note that this calculator does not include property taxes and insurance.

Get Prequalified for a Home Loan

The First and Most Important Step to Buying a Home

Getting pre-qualified or pre-approved for a loan is one of the most important steps of beginning your new home search. Why? Most importantly, home buyers need to get a home loan that's right for them with the lowest cost and best terms.  It's crucial to understand all the variables involved in a loan and what costs are involved. It's not the idea of just being able to get a home loan, it's being able to get the right home loan for YOU.  Also, purchase contracts typically require buyers to apply for home financing within a given time period.  By meeting with loan officers in advance and identifying home mortgage programs, it eliminates the need to quickly find a home lender, check credit, and rush into a financing decision that may not be the best option.  With such a wide variety of home loan programs available including lender credits to use towards closing costs, it's important for home buyers to fully understand and evaluate all options.  Furthermore, it gives you and those working for you the information needed to start out in the right direction. As your agent, with your exact financial parameters, will be able to provide you more specific information on homes and not have you spending time reviewing homes that are not a "fit".

In today's residential real estate market environment, properites can sometimes go under contract within days or even hours of the home being listed in the MLS.  Therefore it is even more important to have detailed discussions with your loan officer about maximum loan amounts, down payments, closing costs, and time required to process the loan before even viewing properties or making offers.

Please be sure to visit these informational pages about Understanding Loan Options and Exploring Interest Rates from the Consumer Finance Protection Bureau that provides great information to get started with your home loan process.

Discussion Topics for Your Loan Officer

I've compiled a list of important topics to discuss with your loan officer.

• Down payment requirements for various loan types and sources of funds that can be used for down payments.
• Closing costs associated with the loan for the Buyer.  Closings costs can be covered in several various methods and its wise to have an understanding of all of these methods and how they will impact your loan and offer.  For example, a lender can offer a lender credit to cover some or all of your closing costs, reducing the amount of funds you need to bring to closing.  However, to receive this credit there will most likely be a small bump up in the interest rate of the loan depending on the amount of the credit.  Also, the Buyer can pay their own closing costs, or the Seller could be asked to contribute to the Buyers closing costs.  Please note thought, that asking the Seller to contribute to closing costs reduces their overall net proceeds from the sale and could have an impact of accepting an offer.
•  Intererst rate lock times.
• Processing time frames from the time a contract is executed until closing.

Home Loan Toolkit

Below is a link to a booklet provided by the Consumer Finance Protection Bureau (CFPB) entitled "Your Home Loan Toolkit".  It will help consumers make better choices along the path to owning a home.  It also contains information on topics from choosing the best mortgage, understand the closing costs and the closing disclosure, and ways to be a successful homeowner.

• Download the Home Loan Toolkit >>

Comparing Lenders and Fee's

Effective in October 2015, the Consumer Financial Protection Board (CFPB)  implemented new processes for both the loan and closing documents and disclosures.  The commonly-know "HUD" or "closing statement" was replaced with a "Loan Estimate" and "Closing Disclosure".  For more information on these recent changes you can view a handout on the CFPB web site.

Once pre-qualified, and you are ready to make an offer, your offer will now stand out from others and can often be given a preference in a multiple offer situation. Put yourself in the sellers shoes. How much more likely would you be to accept an offer and take your home off the market with a pre-qualified buyer versus a buyer that you have no idea about their financial abilities to purchase your home?

FHA Loan Information and Guidelines

FHA Loan Types

Visit the FHA website to learn about the various types of FHA loans that are available. I also have an FHA Brochure that you can view online.

FHA Loan Limits as of January 2018

The FHA has increased their loan limits for our area to $331,200. FHA loans require a 3.5% down payment and all up to 6% seller contributions towards buyer closing costs.  For complete details of qualifying for a FHA loan, please visit the FHA web site.

Summary of FHA Loan Qualifications

Note: Please remember this is just general information on qualifications and each lender will have specific guidelines and overlays to the guidelines. Guidelines do slightly vary from lender to lender.

Down payment, closing costs, and escrows

• 3.5% Personal investment required for down payment.
• Down payment assistance allowed through gifts from family members only or grants.
• Seller contributions towards Buyer closing costs allowed up to 6%.
• Escrows for property tax and insurance required.

Income Guidelines

• Last two years of income should be the same or increasing.
• Self-employment for a minimum of 2 years.
• Part-time job, second job, overtime (guaranteed or 2 year history).

Credit Score Guidelines

• Automated approval, no credit score requirements.
• Manual underwriting of 580 or above.

Credit History Guidelines

• Credit report should typically have less than two thirty day late's in last two years.
• Bankruptcy must be at least two years old, with good credit since.
• Foreclosures must be at least three years old, with good credit since.
• Student loans must be current. 

Debt to Income (DTI) Ratio Guidelines

• Monthly loan payment may not exceed 29% of monthly gross income.
• Monthly loan payment plus other monthly recurring bills may not exceed 41% of gross monthly income.  

FHA 203k Rehabilitation Loan Program

The FHA offers a loan program for handy-man specials and fixer-uppers. Visit the FHA website for more information on this loan program.

VA Loan Information and Guildelines

VA guaranteed loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home which mush be for their own personal occupancy. The guaranty means the lender is protected against loss if you fail to repay the loan. The guaranty replaces the protection the lender normal receives by requiring a down payment allowing you to obtain favorable financing terms.

Benefits of a VA Loan

• No down payment (unless required by the lender or the purchase price is more than the reasonable value of the property.)
• Negotiable interest rate.
• Ability to finance the VA funding fee (plus reduced funding fees with a down payment of at least 5% and exemption for veterans receiving VA compensation).
• Closing costs are comparable with other financing types (and may be lower.)
• An assumable mortgage.
• Right to prepay with out penalty.
• Seller concessions of up to 4%. A seller concession is anything of value added to the transaction by the builder or seller for which the buyer pays nothing additional and which the seller in not customarily expected or required to pay or provide. Seller concessions may include payment of the buyers VA funding fee, prepayment of the buyers property taxes and insurance, or payment of extra points to provide permanent interest rate buy downs. Seller concessions do NOT include payment of the buyer's closing costs.
• For all types of VA loans, the loan amount may include the VA funding fee. No other fees and charges or discount points may be include in the loan amount for regular purchase or construction loans.

Additional VA Loan Information

More information on VA loans is available at the Department of Veterans Affairs Home Loans web site.