From the category archives:

OC First Time Homebuyer

CalVet Home Loans for Orange County, CA. Veterans

by Vincent Bindi on September 24, 2007

It’s funny how things often come around full circle.  15 years ago the Zero Down Veteran Administration (V.A.) Loan was about the only loan program available which allowed home buyers to purchase a home with 100% financing… as long as you were a veteran of course.  Starting about 10 years ago, the zero down conventional loan was created and more and more mortgage lenders offered this type of financing.  So for the past 10 years or so, the VA loan was largely ignored by many mortgage brokers in favor of the zero down conventional loan which had fewer qualification restrictions (the main restriction being having Veteran status), and allowed for a higher purchase price.  Well, we have now gone full circle, for the zero down – 100% financing conventional loan is just about extinct. 

Today, the VA loan is one of the few loan programs left that enables prospective home buyers to purchase with 100% financing, with the exception of the Acorn Loan and the CalHFA Loan..  And as fortune would have it, the state of California has teamed up with the Veterans Administration to offer a superior loan product called the CalVet Loan, which provides 3 very exciting zero down payment loan programs.   The other fortuitous event, is that home prices have now dropped about 10% in southern California, which gives many veterans a window of opportunity to purchase a home here in desirable Orange County, CA. using the Cal-Vet loan.  We’ll highlight the 3 basic CalVet Loan programs below.

The first program is a CalVet loan plan geared towards low income Cal Vet home buyers.  Of course, here in Orange County, the CalVet administration considers anyone individual making less then $$103,000 per year as a low income buyer, and any family making less then $121,000 per year as a low income family.  That allows many Veterans wishing to  to purchase a home in Orange ?county to qualify.  The exciting part is the this loan offers 5.25% fixed interest rate amortized over 30 years.  And it allows for a maximum purchase price of $521,000.  Also, one can have a credit rating as low as a 580 FICO score, and debt to income ratios as high as 55%.  That’s one great loan program made available to a very deserving group of individuals.

The second loan program we’ll highlight is one made available to Vietnam Vets.  This program has all of the great advantages as the above with the low 580 FICO score cut-off, and the high debt ratio with zero down.  But there is not maximum income restrictions and the interest rate is 5.5% fixed over 30 years.  Again, a fantastic opportunity for Vietnam Vets.

The 3rd loan plan is the basic Cal-Vet loan which again offers zero down – 100% financing for home purchase.  Plus the FICO score can be as low as 580, with 55% debt ratios.  The interest rate of this program is 6.55% fixed over 30 years with purchasing power up to $521,000.  (The rates, terms and conditions specified in this article are subject to change at anytime due to market conditions and CalVet guidelines)

You may ask, what can I buy in the desirable and high priced Orange County CA. real estate market ?  Well you would be surprised today as to what you can buy.  For example, today there are a total of 1,267 detached single family homes (SFR) available for sale throughout Orange County, CA.  Plus, there are 4,051 attached condos for sale with 2 bedrooms or more.  That’s are large selection of homes and condos to choose from.

If you would like more information about CalVet Loans here in Orange County, CA. please feel free to call us anytime at:  949-388-3396 or email us at:  Info@OCCalVetLoan.com .  Also, if you would like a list of all homes or condos for sale, that you could purchase using one of these Cal Vet loans, just contact as above.  If you would like to search on the Internet for all homes and condos for sale in Orange County, just visit our website at:  Orange County Homes for Sale

Orange County ACORN Loan offers 100% Financing and Much More !

by Vincent Bindi on June 1, 2007

No, this is not another zero down loan scam program… This is a legitimate government backed loan program designed to help California residents buy their first (or second) home.  The ACORN loan can be used to purchase single family homes (SFR) and condos, as well as manufactured (mobile) homes on permanent land (not leased land).   ACORN (Association of Community Organizations for Reform Now) loan program limits the purchase price of the home to $500,000 in Orange County, and the maximum income the buyer(s) can make is $109,620 in Orange County, CA.  In Riverside county the maximum income limit is $80,500.  The ACORN loan is similar to the CHFA loan, but has several advantages as outlined below: 

  • 100% Loan to Value, meaning Zero Down financing.
  • NO PMI is required (CalHFA requires PMI)
  • The ACORN loan in not based upon the buyers FICO credit score. There is no minimum FICO score required.
  • ACORN allows up to $1,200 per month in undocumented income.
  • Recent Bankruptcy is allowed if the borrower has re-establish credit.
  • 3 Months of mortgage payments in the bank at closing in not required.
  • The Seller can credit the home buyer up to 3% to 4% of the purchase price, or the Selelr can pay for all of the Buyers actual closing costs.
  • A minimum of only $500 is required from the home purchasers own funds.
  • Ratios of income to debt can sometimes be as high as 60/60.
  • Public assistance and voluntary child support is counted as income.
  • There is no equity gain recapture clause as is the case with the CHFA loan.

This exciting home purchase mortgage program is not just limited to first time home buyers.  As long as the potential buyer does not own another home at the time of the application, they can qualify for the ACORN loan.

It gets even better.   This loan program is one single zero down loan and there is no second trust deed mortgage like many of the other 100% financing programs around today.  The interest rate is very low for this ACORN loan.  For example, at the time of the writing of this article rates were at 6.62% fixed interest for 30 years  (rates are always subject to change on a day by day basis).

What’s the catch you may ask ?  Well there isn’t one, except for the maximum income limits of the home buyer, plus the prospective home buyer must attend a mandatory 3 hour First Time Home Buyer education class.

If you would like to learn more about this little known exciting loan program, or if you would like to find out if you can qualify for this loan, please feel free to contact us at:  949-388-3396 or email us at:  Info@SearchOCHomes.com

 

Orange County Zero Down CalHFA Loan

by Vincent Bindi on May 6, 2007

There is a little know State of California government subsidized loan program available in Orange County, CA. called the CalHFA loan (CalHFA stands for California Housing Finance Agency), and is even called the CHFA loan for short.  This exciting loan program allows a buyer to purchase a home with Zero down payment, with a FICO score of around 630, and offers below market  fixed interest rate financing (today’s rate is just 5.75% and is subject to change), which is fully amortized over 30 years…  There are some limitations though that we will get into in just a moment… but first a segue regarding Zero down loans.

Lately, there has been a lot of bad press (deservedly so) regarding certain types of Zero Down loan programs here in Orange County… The problem has been primarily due to the lax underwriting standards in which buyers were able to get Zero down financing with FICO scores less then 620, and the borrower did not have to proof their income (this is called a Stated Income loan… essentially, you could just make up a figure).  To make matters worse, some of these loans offered adjustable rate mortgages, or worse yet, negative amortization loans, in which the loan balance would increase every month.  These issues are not a concern with the CalHFA loan as explained below.

Here are the basic qualifications and limitations of this fantastic loan program:

1.) First Time Home Buyer:  The State of California created this program to assist first time home buyers, therefore the prospective Home Buyer cannot have owned a home in the past 3 years.  The good news is, if you owned a home 4 years ago and sold it,  then you are eligible, as long as you have never used the CHFA loan before. 

2.) Income Limits:  Since this program is geared to assist first time homebuyers, the State has placed maximum income limits for CalHFA home buyers.  It varies by which county in California that the home is located in.  For Orange County, CA. the income limits for Moderate Income home buyers are as follows:   $103,920 for a 1 to 2 person family.  $121,240 for a 3 or more person family.  

3.) Credit Requirements:  The home buyer must be able prove their income with either W-2 forms from the employer or if self employed, one must produce 2 years of Tax Returns or 12 months of bank statement.  Secondly, the CHFA program only offers fixed interest rate loans, so one need not worry about rate increases down the road, nor negative amortization. The FICO score requirement varies, but typically a 630 or better FICO is sufficient.

4.) Sales Price Limits:  Again this program is designated for first time home buyers in Orange County, Ca. therefore the State of California does not intend to make this loan available for buyers who want to buy a $750K home.  The maximum price home that one can buy in Orange County using this CHFA loan is $571,278 for existing re-sale homes and condos, and $591,272 for new construction.

In addition, the CalHFA allows the Seller to grant the home buyer a credit through escrow that helps to pay for some of the Buyers closing costs.  Last year, we negotiated a purchase of a home for one of our clients using this CalHFA loan, and that buyers total home acquisition costs were just $767 !

CHFA does not loan money directly to consumers, but works through and uses approved mortgage lending institutions to qualify potential borrowers and to make the mortgage loans. The fee’s that these mortgage lenders may charge can vary from lender to lender, but the program is highly regulated by the State so the variation in fee’s are kept to a minimum.   There is some flexibility with regard to the FICO score.  If someone has a FICO score below about 620, it may still be possible to qualify for this loan depending upon the reasons for the lower FICO score. 

There is a Conventional CalHFA loan and a FHA based CalHFA loan.  Each have their advantages and disadvantages. There are other details and pertinent information regarding the CHFA loan, such as the potential of a Recapture Tax, Lower Interest Rates for Low Income buyers versus Moderate Income Buyers, High Cost versus Non High Cost Areas, special Lower Interest Rates for School Teachers in Target areas, and more.  But these topics are bit beyond the scope of this blog article.  There is also another little known government subsidized below market loan program, that is similar to CalHFA, and it is called the Acorn Loan program.

Fore more information about the CHFA loan here in Orange County, CA., or for a referral to several trusted Orange County CalHFA mortgage lenders, please feel free to call us at:  949-388-3396 or email us at:  Info@SearchOCHomes.com

How to Buy an Aliso Viejo Condo with Zero Down

by Vincent Bindi on October 21, 2005

It’s not easy to buy your first home in beautiful Aliso Viejo, CA. The typical loan today requires thousands, if not ten’s of thousands of dollars of cash upfront, plus the monthly mortgage payments usually require two income producers. But there is good news for first time homebuyers.

There is a little known government loan program which allows you to buy an Aliso Viejo home with Zero down payment, at a 4.75% fixed interest rate for 30 years! Plus, this loan will allow you to get up to 3% credit from the seller to be used for your closing costs. The above is today’s interest rate and could change at any time, plus the 4.75% interest rate is for ‘Low Income” buyers. For “Moderate Income” buyers, the rate is 5% today.

As an example, one of our Buyers used this loan to buy her first Aliso Viejo Condo, and she did it with Zero down payment, and we got a credit from the seller so her total closing costs were $785!

What’s the catch you may ask? Well, there are not catches, but there are some terms and restrictions. First you have to be a first time homebuyer, which the Government defines to be a person who has not owned a home for more than 2 years. So if you owned a home and sold it 2.5 years ago, you meet this requirement. Second, this loan only applies to homes in Aliso Viejo that are priced no more than $491,000. Third, there are minimum and maximum income restrictions. Below is a table for the maximum income you can make if you are considered a “Moderate income” families:

1 to 2 Family members   – $92,160/Year

3+ plus Family members – $107,520/Year

If you are deemed to be a “Low income” the maximum income restrictions are lower than the moderate maximum income restrictions listed below. In addition, it is possible to add or remove income producing family members from the purchase in order to meet the maximum income guidelines.

Also, there is a re-capture feature, which is a bit too complicated to explain in this short blog. Suffice it to say, that the potential re-capture program is well worth the benefit that this loan program offers, plus of the many home buyers who used this loan, non of them ever had to exercise the re-capture program.

These terms and conditions may sound a little bit confusing at first, but the several lenders that we work who offer this loan program do most of the processing work for you. So the application process is actually very easy.

This fantastic loan program can be used to buy any home with zero down in Aliso Viejo or any other city in Orange County. If you would like to learn more about this exciting zero down loan program, or if you want to search for every listed  home for sale in Aliso Viejo, just visit our website at: Aliso Viejo Real Estate.

Buying Home in Orange County for the first time

by Vincent Bindi on October 3, 2005

Buying a Home in Orange County, CA for the first time is a challenge… You may be wondering - How much can I afford? Where is the best location to Buy in Orange County? How much money do I need for a down payment? and to top it off, you’ll have a monthly mortgage obligation for the next 30 years..!!!

Hears the good news…. Having bought and sold many homes of mine own, and helping hundreds of people buy their first home, I can assure you that is well worth to Buy a home in Orange County in the long run.  Orange County, CA is arguably the best place to live in the USA, and offers a wide range of homes designed for the first time home buyer.

Where to buy in Orange County is a complex question.  The answer depends greatly on where you currently work, and how long of a commute your willing to make.   How much of a home can you afford. Do you want to Condo or a townhome? How important are the public school districts, proximity to the beaches, freeway access etc.  Once you have an answer to those questions, than a real estate professional can help guide to the cities and communities that will best fit your needs and desires. 

Today, there are many options and loan programs available geared towards first time home buyers that did not exist just 5 years ago. These loan programs offer no down payment of very low down payment financing.  There are other loans targeted for the self-employed so that you don’t have to verify your income (usually called a stated income loan). While other loans exist offering adjustable rate mortgages, interest only mortgages and now a new 40 year amortized mortgage. Sometimes, we can negotiate with the home seller to pay for your closing costs…  If your like most people in this state, the home that you own and live in will be your best and most valuable investment in your life.

Orange County real estate has produced great price appreciation for many decades now, and estimates are that will continue for decades to come. In addition, the tax advantages for owning real estate are fantastic.You can deduct your interest payments on your home from your income taxes.  After having lived in your home for 2 year or more, you will not owe any capital gains taxes if your home sale profits you $500K or less (if your married, if your single the number is $250K).  If you work out of your home, you can depreciate the portion of the home used as an office from you income taxes.  Home ownership is a great tax shelter.

To help with your home search, find a good Realtor who specializes in working with Buyers.  Make sure they set you up with today’s new computer technologies.  One of the computer services is normally referred to as an email alert service of new listings.  When a new listing comes on the market that meets your needs and wants, this computer service will email the details of this new listing to you. This new OC Just Listed home finding service brings peace of mind and convenience to today’s busy home seeker.

For more information on how to buy your first Orange County Home, just visit our website: Orange County Real Estate. 

Buying a Home with Zero Down payment in Mission Viejo.

by Vincent Bindi on July 19, 2005

Years ago, the only person that could buy a home in Mission Viejo with zero down payment using a new purchase money loan were Veterans of War (called a VA loan). In the past several years, there has been an explosion of new loan programs designed to fit most any buyers circumstances. Today, most anyone can buy a home with zero down payment if they have sufficient income and decent credit.

There are three factors that determine if you have sufficient income to purchase a home withzero down payment, and they are: Purchase price of the home, Interest rates, and debt to income ratio that the mortgage program requires. These three factors are interrelated as described below.

The debt to income ratio is the monthly mortgage payment of the zero down loan, divided by your monthly gross income (not your net take home income).This ratio can vary from 35% to 50% dependent upon the loan program, and your credit score. The monthly mortgage payment is determined by the purchase price, current interest rates, and the type of mortgage program, such as 15 versus 30 years, fixed versus adjustable interest rate, etc.  There is another ratio that mortgage lenders look at which is the total debt to income ratio which is too complicated to discuss here. This ratio also analysis other debts that you may have such as car payments, credit card payments, etc.

You’re your credit rating is reported by three different reporting agencies called Experian (formerly TRW), EquiFAx, and TransUnion. Your rating is boiled down to a single number, called your FICO score. An excellent FICO score would be about 800 and higher, and good scores about 700 to 800, an average rating is about 600 to 700, and a poor FICO score is below 600.Some mortgage lenders even have some zero down loan programs for borrowers with poor credit ratings at somewhat higher interest payments and lower debt to income ratios.

We are sometimes asked if you can buy a home with no money at all. The answer is no under most circumstances. Even thought the down payment is zero, there are sill some closing costs. Closing costs are typically comprised of loan origination fees, loan processing fees, possibly loan points, Appraisal fee, ALTA title policy, and escrow fee. But there are other options. We can sometimes negotiate with the seller of the home to pay for a large part of your closing costs. Our best result to date, is we helped a buyer purchase a Condo in Mission Viejo and their total out of pocket cash expense was $795 !The buyer was a single woman, who was a first time buyer, using a zero down loan that we found for her, and her credit was average. We were able to convince the seller into paying for all of her closing costs except for $795. That home owner now has over $50,000 equity in her home which she can keep tax free if she were to sell that home today!

If you would like to learn more about buying a home in Mission Viejo with Zero down or low down payment, visit our website: Mission Viejo Real Estate

by Vincent Bindi