CA Home Buyer's Loan Options in 2011

By
Real Estate Agent with Seven Gables Real Estate

2011 is the year of CHEAP MONEY!  With interest rates so low it is a great time to buy a home, or refinance a current loan.  Recently, I held a Home Buyer's Seminar where Mr. Jeff Parks, Bank of America Loan Officer, spoke about current financing options.  Watch his video about Types of Loan Programs

GOVERNMENT LOANS:

  • -FHA
  •  -203 K "rehab" loans for homes that won't qualify for financing or upgrades financed
  • -VA
  • -Fixed Period "Hybrid" Arm
  • -15 and 30 Year Fixed
  • -GIFT FUNDS can be used
  • -LOW DOWN PAYMENT 3.5%/NO DOWN PAYMENT
  • -NON OCCUPYING CO-BORROWERS
  • Current Maximum Loan $729,750

  CONVENTIONAL LOANS

  • -Higher down payment (minimum 10%, normally 20%, non-owner occupied minimum 25%)
  • -Fixed Period "Hybrid Arm"
  • -10,15 and 30 Year Fixed
  • -"Conforming" Maximum Currently $0-417,000
  • -"High Balance Conforming" $417,00-$729,750
  • -"Jumbo" Over $729,750

The maximum for FHA loan limits and Conventional Conforming limits is set to expire 9/30/2011 and will be reduced to $625,000 if it is not renewed.  It is not expected to be renewed, so if you are considering a home purchase that will require a loan limit over 625K, you may want to get locked into your loan by the end of summer.

A couple of programs that Parks did  not mention are the FNMA HOMEPATH financing program and the CalSTRS program for California public school/district/community college employees. 

Homepath is for properties that are owned by FNMA 

  • Require only a 3% down payment
  • Allow a larger seller paid closing cost contribution
  • No appraisal necessary
  • Condo association requirements are looser

CalSTRS for CA Public School/District/Community College Employees

  • 3% Down payment required with at least 1% direct from borrower
  • 80% First mortgage and 17% Second mortgage
  • Maximum loan limit $650,000 1st and 2nd combined
  • Second loan is deferred for first 5 years

It is imperative to know all your options before setting out on your home search.  These programs are constantly evolving so be clear on what works for you, your budget, and future life decisions.

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