FHA 203K Home Loan

FHA 203K Home Loan Folsom & Sacramento, CA

The FHA rehab loan program, otherwise known as the 203(K), has been requested more and more by our clients, so I think it’s a good time to talk about it here. The 203(K) is broken into two programs, the Streamline and the Full. This loan program can work with FHA or Conventional home loans. The streamline permits work up to approximately $35,000 including the contingency holdback, and the Full permits more extensive work over $35,000. One thing to note is that this programs is not for any work the FHA deems as a luxury item, such as a pool.

203(K) Streamline Loan

Let’s just talk about the 203(K) Streamline. The Streamline permits homebuyers and homeowners to finance up to $35,000 into their mortgage to repair, improve, or upgrade the home they want to purchase or refinance. The Full 203(K) can go much higher than the streamline. Now, this includes work such as a roof, carpet, kitchen, bathroom, paint, downspouts etc. It’s a pretty extensive list of repairs and upgrades, and you can really improve the value of the home. The actual loan amount is based on the projected value of the home with the repairs and upgrades. Which may mean you walk in with more equity than if you bought a move in ready home. This program may not be used to do major structural work such as adding a room, moving a load-bearing wall or for projects that that will take over 6 months to complete.

203(K) For Homeowners

Are you not sure if you should Move or Improve? If you own a home that needs updating or repairs, you may be able to use a 203(K) Refinance to either make property repairs and improvements, or prepare your home for sale. It’s a great way to make your home move-in ready by remodeling the kitchen, painting the interior or purchasing new carpet. Plus, you have a better chance of getting top dollar for your home when you go to sell, as well as, potentially, a quicker sale when its move in ready! This type of loan product can also help you increase your equity faster. You won’t know unless you check it out.

203(K) History

The mortgage must be a first lien on a one-to-four unit owner-occupied dwelling. Over the years, lenders have successfully used the FHA 203(K) loan program in partnership with state and local housing agencies and nonprofit organizations to rehabilitate properties. This program was critical to municipalities that needed to revitalize neighborhoods and reclaim them as desirable areas to live. This revitalization is also good for the homeowners in the area, that felt helpless as their neighborhoods fell into disrepair, taking their home values down with them.

Everything Good Takes Time

As a loan product, it takes a little extra time and work for all, but this program can be very useful for homebuyers that are interested in a property that needs a little TLC. Buying a property that needs work means you may often get it at a lower price so you aren’t paying for someone else to do the renovations. As a result…instant equity!

How to Have the Greatest Year Ever

How to Have the Greatest Year Ever

I believe you can make next year your best year ever. Life doesn’t have to be hard, and you don’t have to be bored. It really comes down to being intentional. If you mean what you say and are motivated to get what you want, taking action with the intentions of meeting your goals will be second nature. Once you get the steps down, you won’t even have to think about it! Although, it does take some time to keep your goals in mind in everything you do. That is being intentional!

Well, after researching and reading articles, I came up with a list of 5 steps that can get you there. I have to say, I was very impressed with some of the blogs I read on this topic. So, follow these steps to create your best year ever:

  1. Reflect on last year. Ask yourself what worked and what didn’t. What events or activities did you really like, or dislike. Actually, take time to review your calendar so you don’t miss something important.
  2. Write down the major big visions you see for your life. Go up to the 40,000 foot level and make a list, like have a family, be financially independent, retire by you are 55, etc…
  3. Now set goals. What are your goals for this year, next 3 years, 5 years etc…
  4. Find your why. Why do you want what you want? Ask yourself the questions over and over, until you get down to the real reason.
  5. Set up systems to implement your plans. Calendar milestones you need to meet in order to complete your goals. If you are more visual, get an old school calendar and put it on the wall where you can check it every day.

Like this year, at the end of next year, review what you’ve done during the previous year and start the process over.

You can do this every year and make your next year your best yet. It’s all about living intentionally and to do that, you need to follow these steps.

The more I read, the more I understood how important these steps are, and I realized how they relate to real estate. Real Estate in Sacramento, Folsom, Roseville, Elk Grove, and the El Dorado County areas can be a great way to build wealth throughout your life time. If buying a home or becoming a real estate investor is something you wish to do, set your goals and be intentional. Well that’s my tip, and I hope it helps you have the best year ever. Give me a call if I can help with a preapproval or refinance. Have a great day.

History of Mortgage Rates

The History of Mortgage Rates (1981 – 2016)

You may be inundated with lenders tooting their horns about the near record low mortgage rates we experienced all of 2016. You hear it so often that you’ve tuned out. Well, it’s hard to appreciate where we are today if we don’t look at the past.

So let’s take a quick look:

Mortgage_Rate_History

  • In July 2016 – rates hit the lowest since 2012 = 3.44% with a cost of ½% and in August went even lower to 3.36%.
  • Today – average rates are about 4.02%
  • In December 2012 – The lowest since FNMA has kept records, rates were 3.35%
  • 10 Years Ago, in 2006 – we had a 6.41% annual average rate
  • At the turn of the Century, 2000 – 8.05% was the annual average
  • 20 Years Ago, in 1996 – it was 7.81%
  • 30 Years Ago, 1986 – it was 10.19%
  • The All-Time High was in October 1981 – at 18.45% with 2.3 points. That was the month that President Reagan was shot, Pope John Paul was shot, and the stock market reacted.

So, to put this in perspective, if you bought a house in October 1981 at $200,000 with 20% Down, your payment would be $2,471.17 plus taxes & insurance. If you bought a $500,000 house with today’s rates, your payment would be about $1,824.21 plus taxes and insurance. The mortgage interest rates play a huge role in affordability, balancing out today’s home values. My point is that looking back into history may be the dose we need to really appreciate where we are today and help you understand why lenders keep shouting from the rooftops.

As we go into the next year, the bond market is uncertain, so rates may continue to climb modestly, per many of the industry analysts. Regardless, rates historically are still very affordable and now is a time to lock it in. Whether you are buying your first home, moving up into that forever home, downsizing into a luxury home, or refinancing your existing home, don’t procrastinate or hedge the market.

FHA Home Loan and VA Home Loan

For many first-time homebuyers, there are low down payment options such as the FHA Home Loan and VA Home Loan. There are also down payment assistant programs like the Sapphire Grant Program, CalHFA Plus with Zip, and several others. There are even programs that help pay for part or all your closing costs like the one for teachers called the CalHFA Extra Credit Teachers Program.

If you’d like more information on any of these programs, for today’s mortgage rate, or to get preapproved, give us a call today to get started. We get it. We love to help you meet your homeownership goals.

Before Buying a Home in Sacramento

8 Things to Do Before Buying a Home in Sacramento

Buying a home is an intense process, especially so for first-timers. In some areas of Sacramento County there is competition for homes on the market. They can get snatched up quickly, so being prepared is prudent. In the El Dorado County areas, homes tend to take a little longer to sell, again, depending on the area. Being prepared in any market environment is a great strategy. The fall and winter Real Estate Market can be a great time to buy or sell. So, I’ve compiled a list of 8 things to do before buying a home.

  1. Make a List of What You Want – What are your “must haves” in a home, now and for the future? A wish list will get it straight in your mind, but also help an agent find homes best suited to your needs. Plus, it forces you to plan for your family’s future needs as well.
  2. Get Your Documents Together – Here are a few of the documents you will need to provide your Lender:
  • Check stubs
  • W2’s for the last two years and tax returns.
  • Bank statements, usually about two months’ worth.
  • And more…

If you are planning to buy a home and don’t know where these are, I suggest you locate them immediately. Then put them where you can access them quickly.

  1. Maximize Your Credit Score – Your credit score will weigh heavily on your ability to get a loan and get the best rates. Check it and make sure you have done everything possible to get it as high as you can. You can opt to have a credit company such as Blue Water Credit in Roseville, CA, take a look to see if there are ways to improve your score quickly.
  2. Get Your Mortgage Preapproval – A preapproval will let you know how much home you can afford. Depending upon your finances and credit score, you may also qualify for an FHA loan at 3.5% or Down Payment Assistance programs. In high demand markets, such as the Folsom Real Estate market, it will give you a strong advantage to have a preapproval when you make an offer.
  3. Do Neighborhood Research – Before you make an appointment to start seeing homes, make sure you research the neighborhoods you are interested in. Park in the neighborhood and just listen at different times of the day. And perhaps on different days as well! You may not hear that freeway noise on a Saturday afternoon, but at 5pm on a Tuesday, it is noticeable.
  4. Budget for Not-So-Hidden Fees – Ask your lender what fees and expenses you will encounter during the process, such as paying for an appraisal, home inspection, etc… and budget for those expenses.
  5. Stay Organized – You will need to have quick access to your documents and files. The quicker you respond to your Lender requests, the quicker you can be in your home.
  6. Hire a Realtor – Your lender may have agents they can refer, but make sure you really take some time in finding the right realtor that will represent you and understand your needs.

I hope these tips will help ease the process for your home buying experience. Buying a home doesn’t have to be stressful. It should be so, so worth it. Stay organized. Stay calm. If things don’t go your way, just remember why you wanted to buy a home in the first place. We get it. Give us a call, we can help. Thanks for joining me this week. Have a great day.

Donald Trump Presidency and the Housing Market?

What Does a Trump Presidency Mean to the Housing Market?

Well, we, the people have spoken and Donald J. Trump was elected as the 45th president of the United States

Change was demanded from the rural areas and that is what we will have. It was unexpected by even his campaign team! But it was a bit of a shock for many, especially on the West Coast. In our area, we have not actually experienced much in the way of job losses in US manufacturing. Nor have we had a lack of wage growth. So, what all does this mean for the housing market? Should you hurry up to buy before interest rates start rising? Or wait to see if the home values decline, if they do? What should we do?

First, we should all take a deep breath

The US equity markets are starting to calm down as the meaning of a Trump presidency unfolds. As for what this means to the housing market, it’s too early to make any predictions. But, Trump ran on a platform of deregulation, which could be good for real estate. Banks may have the freedom to offer more loan products, which in turn, could further energize the market as more buyers may qualify for home loans. As for the interest rates… well, the concerns over rising interest rates may be overstated, but we are already seeing them rise. Watching the bond market closely will be prudent. Although, the experts are still hopeful that the increases will cap at less than 5% by the end of 2017.

Trump proposed more infrastructure spending, which if it comes to light, this could boost employment and wages

Another positive for the housing markets. The proposed easing of land use regulations, may begin addressing the problem of housing affordability, which is a huge issue in California housing markets. The new construction industry is reporting only 40% staffed with tradesmen. When the recession hit, many of those workers went on to new careers, leaving a huge gap in available skilled workers. This new construction is critical to the Sacramento Real Estate Market, to relieve the low inventory issues and support a normal home value increase.

In the near-term we may see some temporary upheaval, including in the housing market, as the Trump presidency takes shape

But, for right now, there isn’t any need for panic in the housing sector. The Sacramento Housing Market should continue to be in good shape for the near future. FHA Home Loans are continuing to provide low down payment options, as are the VA Home Loans.

Extra Credit Teacher Home Purchase Program (ECTP)

Extra Credit Teacher Home Purchase Program (ECTP)

On November 3rd, CalHFA announced changes to its Extra Credit Teacher Home Purchase Program (ECTP). The changes allow more K-12 public school employees—including administrators and support staff such as aides, bus drivers, food services workers and janitors—to receive as much as $15,000 in down payment assistance. The program includes educators at public charter schools, school district offices and county continuation schools.

The Extra Credit Teacher Home Purchase Program helps with the down payment and opens the door for more teachers to become homeowners. Under this program, public school employees in California’s 35 high-cost counties —including Sacramento, Placer and El Dorado—could qualify for a maximum of $15,000 or 3.5 percent of the sales price or appraised value, whichever is greater. The maximum home price is buying homes for less than $430,000 in those counties.

Educators must meet county-by-county income limits for the program, which are based on the number of people living in the home. For example, the income limits for a family of four using a CalHFA FHA first mortgage are $90,700 in Los Angeles County, $150,750 in San Mateo County, and $106,500 in Sacramento County.

The down payment assistance is in the form of a junior loan. Homeowners are not required to pay back the loan until the home is refinanced or sold, or the mortgage is paid off.  CalHFA offers additional programs that help with closing costs and can be combined with the Extra Credit Teacher Program, making home-ownership even more attainable. If you know of teachers that would like to purchase, this is a great program to help them get into their first home. Combined with other Down Payment Assistance Programs, home ownership is a possibility.

Give us a call if you want more information, or click here for the CalHFA Extra Credit Teacher Program.

2017 Housing Market Forecast

The California Association of Realtors has released their 2017 Housing Market Forecast. Why is that important? Well, if you plan to sell your current home to buy that forever home, to downsize, or even get into the market for your first home, knowing what the housing market is forecast to do over the next year is important. Instead of having you read the whole forecast, I went through the informative 133 pages and broke it down into factors affecting the forecast, what that forecast means for us locally and what the experts are saying.

Why is the Housing Forcast Important to Understand?

Important Factors Affecting the Forecast

Now, the first big news is that the Sacramento area is still 15.7% under the peak median home price of $394,450 in August of ’05 at today’s median price of $332,580. Secondly, rates remain attractive. A 30-year fixed is still in the low to mid 3’s. The economic outlook is good despite some uncertainty such as:

2017_mortgage_forcast_01

  • the effect of Brexit
  • the Presidential election
  • the weak global production and exports
  • and the unexpected decline in oil

Here are a few more important takeaways:

  • California jobs are back, losing 1.3M during the recession but gaining 2.2M since January ‘08
  • Unemployment rates at an 8 year low of 5.5%
  • Consumer spending has been robust in 2016
  • Consumer confidence at a 9-year high

So, where is the inventory? Supply is remaining tight, or at least below the norm. Statewide we are at 3.4 months, and 2.9 months locally. Also, long-time homeowners are not moving, staying an average of 10 years, up from 5 years in 2009 citing the main reasons:

  • Low rate on current mortgage
  • Low property taxes
  • Capital gains hit
  • Where can I afford to go?
  • Could not qualify for a mortgage today

The last little statistic I thought was notable is, when asked what super power would you like to have…

2017_mortgage_forcast_02

  • the #1 answer at 29% was to make traffic disappear,
  • #2 at 26% was the ability to fly,
  • but the third top answer at 21% was to have Instant Mortgage Approval!

That’s a great sign that consumers are seeing the value in homeownership.

Demographics at Play in the Housing Market

First, 64% of the baby boomers say they do not plan to sell their home when they retire, yet, 92% have equity in their home. This makes a huge difference in the inventory level, as they contribute inventory when they sell and buy. So why are they not moving?

  • 44% say Their $1M+ in equity isn’t enough to retire in style.
  • 13% say They plan to be buried in the back yard and leave their home to their kids
  • 2% say They want to see all their children living under the same roof again.
  • 41% say All the above!

Maybe if they knew about props 60 and 90, they’d take the plunge! So, let’s check in with the Millennials now

  • When asked how important is the American Dream: 90% of Millennials say it is Moderately to Very Important to them.
  • When asked what part of the American Dream is most important:
    • 18% said owning a home
    • 18% cited a fulfilling job
    • 16% thought a family is most important
    • 14% put education as number 1 and so on.
  • When asked if they thought buying a home was a good investment, 82% agreed.
  • When asked if they knew they could qualify for a mortgage with a lower down payment would they purchase a home:
    • 69% said they would start looking today
    • Only 19% knew about the FHA program, meaning 81% are unaware they can put down as little as 3.5%!

The last demographic I found compelling was Renters. Nearly half of the renters’ plan to purchase a home within the next 5 years. 55% of them have already prepared to buy a home by either speaking to a realtor, searched for homes, gotten preapproved, etc.

These demographics are positioned to impact the market in 2017. Baby boomers are staying put, which can keep the inventory low, millennials will jump in as they learn about their options, and renters are tired of paying higher and higher rents.

What the Experts are Telling Us

Nationally:

  • The GDP will increase 2.1%, compared to 1.5% in 2016
  • Unemployment should drop to 4.7%
  • The Consumer Price Index should increase 2.1%, compared to the 1.4% for 2016
  • The 30 Year Fixed Rate may increase to the 4% range

In California, unemployment should drop to 5.3%, with a 1% population growth, and real disposable income is expected to increase from 2.9% in 2016 to 3.5% in 2017. Now, 62% of the expert economics say that the housing market will increase in volume and price in 2017.

  • Volume in sales will increase 1.4%
  • Median home price will increase slightly at 4/3%
  • Affordability statewide will decrease to 29%
  • And the 30 Year Fixed Rate will go up to 4%

The lack of affordability will be our biggest challenge. Although locally, we are positioned well with affordability around 47%. The low affordability in the coastal regions should drive more homebuyers inland. So, the 2017 Forecast is positive for our area as volume is expected to increase and values up slightly.

Your 2017 opportunities are to:

  • Educate first-time home buyers – talk to their parents
  • Become well versed on down payment assistance programs, debt management and improving credit to turn renters into buyers.
  • Don’t give up on international buyers

The big message in this forecast is to stay involved & stay current as the housing market should be better in 2017 than it was in 2016.

The bottom line is that 2017 promises to be a great housing market environment. Sellers will continue to have a slight advantage with fewer than the normal number of homes on the market. Buyers can take advantage of the continuing low rates, as well as the low down payment options such as the FHA program. And as rents continue to rise faster than home values, there isn’t any reason to delay buying your own home.

Interest Rate Reduction Refinancing Loan Sacramento

VA Streamline – Interest Rate Reduction IRRRL

Interest Rate Reduction Refinancing Loan Sacramento

Twelve Years ago, when Stated Income and No Documentation Loans were the rage, VA Home Loans became unpopular because the Government expected borrowers to actually pay them back.

IRRRL stands for Interest Rate Reduction Refinancing Loan. You may see it referred to as a “Streamline” or a “VA to VA.” Except when refinancing an existing VA guaranteed adjustable rate mortgage (ARM) to a fixed rate, it must result in a lower interest rate. Read More Here

Recently VA Home Loans have been on the rise and are becoming the hot ticket and a great loan to have. One of the many benefits of a VA Loan is the ability to do a Streamline Interest Rate reduction without having to get an appraisal or jump through the normal hoops of income and asset qualification.

What is an IRRRL – Streamline VA Loan? Streamline VA refinances are a special privilege provided to veterans who have VA Loans, in that, once the rate goes down enough to show a lower payment on the new loan. Without the typical VA Appraisal or income qualification, the loan is a straightforward process benefitting the VA Borrower by either lowering the payment or trading an Adjustable Rate Mortgage for a Fixed Rate Mortgage.

Is My Loan Eligible for an IRRRL?

African American military father hugging family

In order to get a Streamline Refinance, you will need to meet the following requirements:

  1. On -Time Payments: You must be current on your VA Loan with no more than one thirty day late over the previous 12 months
  2. No Cash Out: This is not a cash-out refinance and you may not receive any cash back
  3. Lower Payment: Your payment on the new loan must be lower than on the current loan. However, this may not be true if replacing an ARM, Adjustable Rate Mortgage, with a new Fixed Rate Mortgage
  4. Certify Owner Occupied: You must show that the loan was for an owner-occupied property
  5. VA to VA Loan: The new VA Loan must be a new VA Loan to replace an existing VA Loan on the same property. This is considered a VA to VA Loan.

Would You Like to Know Today’s VA Rates?

Contact Us Anytime for Rates

Am I Eligible for an IRRRL? If you currently have a VA Loan, occupy your property, and the rate goes down, you may benefit for a Streamline Refinance.

How Do I know that I am Eligible for a VA Loan? In order to qualify for a VA Home Loan, veterans must have served in the military as follows: Over 6 months (181 days) during peacetime, 3 months (90 days) during war time or 6 years (2,190 days) in the Reserves or National Guard. You may also qualify as the spouse of a service member who was killed in the line of duty.

Do I have to Use My Current Lender to Do a Streamline Refinance? No, you do not. Any mortgage lender that provides VA Home Loans usually will be able to provide an IRRRL. In fact, different lenders provide different pricing, so it is a good idea to use a trusted lender and check the market to know what is available.

Will I Get Better Pricing If I Use My Current Lender or Is the Loan Easier to Get? Although many marketing flyers make it sound like using your current lender is going to make a difference, but typically the answer is no. The VA Streamline is a straightforward process requiring very little paperwork, but it is still a new loan that replaces your existing VA Loan.

Do I Have to Go Through a Credit Check and Get An Appraisal? While the VA does not require a new credit report, most lenders will require a credit check to make sure that you are still able to make the payments. When it comes to the Appraisal Report, different lenders have different rules depending on the market. At this time, an appraisal is not required when getting a Streamline Refinance.

Do I Have to Reduce My Interest Rate When Doing a Streamline Refinance? When doing a Fixed Rate to Fixed Rate Loan, you will need to reduce your interest rate and show a benefit in lowering the payment. However, if you have an adjustable rate mortgage and are moving to a Fixed Rate Mortgage, it is not necessary to reduce the rate.

What is the Maximum Loan Size for an IRRRL? While the VA does not have a maximum loan size, the loan amount for a Streamline is limited by the existing principal on your current loan plus closing costs and prepaid items.

How Do I Know If It is Time to do a Streamline Refinance? If you hear that rates are going down, it may be a good time to check in with your mortgage professional. It is a good idea to do an Annual Mortgage Review each year to keep your credit in check and to make sure you’re in the right loan program. Your mortgage professional has many options and it is important to make sure you are positioned properly.

If you have questions, please feel free to call or email Iron Point Mortgage in Folsom and we’d be happy to help. Our New Office is located at 1849 Iron Point Road Suite 120, Folsom, CA 95630.

Located in Folsom, CA serving the greater Sacramento, CA Area. Providing Home Loan, Refinancing and Mortgages.

7 Signs It’s Time to Sell and Buy That Dream Home

7 Signs It’s Time to Sell and Buy That Dream Home

In your mind, you know you need to sell your home and get a bigger home for your growing family.  But your heart isn’t ready to part ways with the home where you decorated the first nursery. I have 7 signs it’s time to let go and make your move.

Selling your home and buying a forever home, is a big endeavor full of hope, emotion, and challenges. Letting go of your first home can be the first obstacle to overcome. I have put together a short list of signs that you may recognize now or perhaps later on when it is the right time to make the move.

The 7 Signs List (Buying or Selling Your Dream Home)

  1. You Have Curiosity about Real Estate: If you find yourself peeking through the real estate ads, wondering what is on the market, that is the first sign that you are interested.
  2. “For Sale” signs popping up around your neighborhood: If a house on your block, similar in size, just sold for what you’d be happy to get for your home maybe it’s time to sell.
  3. Interest Rates: If you worry about the interest rates going up before you make your decision.
  4. Your Home No Longer Fits Your Lifestyle: Another factor to consider is how well your home meets your everyday needs. Perhaps you could use another bedroom to accommodate your growing family
  5. You Outgrew You Home: If you know remodeling won’t fix the lack of living space, number of bathrooms or bedrooms.
  6. School Systems: If you are checking out schools for your pre-kindergartener, maybe another neighborhood puts you in the right district.
  7. You Dream About Another Home: Maybe you just can’t get the vision of your perfect home out of your head at night.

All of these signs, collectively, or individually may mean you are on the path to letting go. And, it all takes time. The perfect place to start, if you think you are ready, is to see what you’d qualify for by getting preapproved. Give us a call for a free consultation, we’d love to help.

How to Save Money Without Trying!

How to Save Money Without Trying!

How to save money for your Next Mortgage, Refinance or Home Loan with Iron Point Mortgage in Folsom, CA

Saving money for small purchases or extra spending money on vacations doesn’t need to be boring or hard. It can be easy and fun! I found two clever ideas that can help you save without really even trying!

It’s very simple. The first idea is to use an empty 20oz bottle, like a coke bottle. You might want to rinse it out first so it won’t be sticky and then and let it dry. At the end of the day, go through your change and deposit all of your dimes. When the 20oz bottle is full there should be over $100 in dimes. Ridding your dimes at the end of the day is so easy and effortless because it doesn’t seem like you’re putting way a lot of money, so it shouldn’t be hard to stash away and the fun part is when the bottle is full. Now you have over $100.

Once you’ve conquered the dime deposit you may want a bit of a challenge. So, my next idea is to make some sort of safe, like a shoebox or a shadow box frame. That makes it more visible and fun. Now every time you get a $5 bill, put it in your “safe”! At the end of the year, you should have a great savings! I’ve paid for my family vacation to Disneyland using this trick!

If you have a great savings tip that works for you, we’d love to hear about it. If you are thinking about a home purchase or just interested in refinancing, give me a call while the rates are at historic lows! Thanks for joining me. Have a great week!