Tuesday, July 25, 2017

Loan Programs 

Reverse Mortgages:   They are not what you may think they are. The original version of this type of loan was not a good loan, they were called Equity Shares, and some lenders are still selling this product. In an Equity Share you sign over your interest in the property to the lender which you never want to do. With this type of mortgage when you sold or passed away your equity was gone. NOT SO with the Reverse Mortgage. The Federal Government oversees and insures this loan through FHA and HUD. In a Reverse Mortgage you never sign over your ownership interest. You own the home just like you do now if you have a loan on it. The difference is that with a Reverse Mortgage it pays off any mortgage(s) you have against the house, eliminating your mortgage payment, and you can live in the home making no principle and interest payment mortgage payment, for as long as you live in the home. When you sell or pass away remaining equity in the home will be yours to keep or leave to your heirs. In fact if your home appreciates at 4% per year (or more) the increase in value will offset the accumilitating deferred payments. If your home appreciates more than 4% a year it can possibly increase your equity over the years. If you are 62 years of age or older this might be the best thing since ice cream for you. Be sure to contact me for more information about this fantastic loan.

With Reverse Mortgages it is required that you have a third party counseling, this is in addition to the counseling I will provide to you free of cost. By calling me I can provide to you a list of approved counselors that will do this service for you, sometimes free of charge, or at a nominal fee. All you need to do is call them and set up an appointment for the HECM Reverse Mortgage Counseling  and can done over the telephone. These counselors are usually backed up about 4 weeks so make sure you schedule this counseling right away. I will need the original copy of the counseling certificate before I can go forward with your Reverse Mortgage. Please call me for a list of approved counselors.

Conventional Loans:   These loans are for purchase or refinances. A conventional loan is a loan up to the current conventional loan limit set by the government. Currently it is either $417,000.00 or up to $580,000.00 depending upon some factors which we can detail out for you when you contact us. Conventional loans are offered at a better interest rate than a jumbo loan which you will see described below.

Jumbo Loans:   These loans are for purchase or refinances as well. Jumbo loans are loans that exceed the conventional loan amounts currently set at $417,000.00 or up to $580,000.00 depending upon some factors that our loan officers would be happy to explain to you. Basically due to the fact that a jumbo loan is more of an investor driven loan they are at a higher interest rate than a conventional loan.

FHA Loans:   An FHA loan is a government insured loan and will allow a lot of latitude in the prequalification process that a conventional or jumbo loan will allow. They are used for purchases and refinances as well. The benefit of an FHA loan is that they will allow for minimal down payment of 3%, or less if combined with another program, they do not require reserves left over in your account after close of escrow, they allow for a non-occupant co-borrower to asset you in qualifying for a home, all of the 3% down payment and all of the closing costs can be a gift, seller contributions are allowed up to a maximum of 6% of the purchase price, you only need 3 years away from a bankruptcy instead of 4 to 5 years with a conventional loan, and a lot of other great benefits. This is a great first time home buyer loan and not all lenders are approved for FHA loans and may not offer them to you as an option because of this. We have been FHA approved for over 12 years. The FHA guidelines for home buying and refinancing can be found by going to their website: http://www.hud.gov/buying/index.cfm

As you have read about FHA loans above you can combine an FHA loan with what is called a down payment assistance program. Normally you would need about 6.5% of the purchase price in money available from one of the above sources to close a straight FHA loan. So for an example on a $350,000.00 purchase you would need approximately $22,750.00 to close escrow. If the seller is willing to participate in a down payment assistance program they can contribute up to a maximum of 6% of the purchase price to the program and in turn the program will fund all but $500.00 towards the buyers down payment, recurring and non-recurring closing costs. By doing this it falls within FHA's guidelines of where the money can come from to close escrow (grant from a non-profit is acceptable). This enables the borrower to reduce the amount they need to close escrow to less than $3,000.00 of their own funds! Quite a savings! Another potential benefit is that the seller MAY be able to deduct this from their income taxes, as it is a donation to a non-profit program. Find out more about one of the many down payment assistance programs by looking at this site www.sgadpa.com or contact us for more information. (Above mentioned figures are subject to change.)

VA Loans and CalVet Loans:   A Veterans Administration loan is a loan made possible by the federal government for military personnel which are currently active duty or not. It provides for a possibility of 100% financing with what is called a VA No No, or a no down payment, no closing costs loan. VA No No's do require the seller to pay for all the costs associated with the loan. If you are a veteran and you have money to put down then a VA loan may not be the best way for you to go. Discuss this with one of our mortgage professionals and they will explain why. A CalVet loan is also for Veterans and offers a somewhat better rate but the way that title is held is very different than any other type of loan. Please discuss this with our mortgage professionals further.

Construction Loans:   We offer a variety of construction loans from stand alone construction loans where at the end of the construction project you will need another loan called your take out loan or permanent financing to pay off the construction loan. We also have all in one construction loans where the construction loan automatically rolls into your permanent financing but typically are a 3/1 or 5/1 ARM where the loan rate is guaranteed for the first 3 or 5 years and then rolls into an adjustable rate loan after that.

Land Loans:   Land loans are used to purchase bare land in preparation to eventually build a home on the land. They are typically short term loans from one to two years which allows you time to have your plans drawn up and be ready to submit for a construction loan which will pay off your land loan. We do have longer term loans from 10 to 25 years for bare land if used currently for agricultural purposes or the intent is to eventually use it for agricultural purposes. The rates on this type of loan is very good too.


Dennis Amaral
Davis & Amaral Mortgage Consultants
Ph: 916-933-9343   -  Fax: 916-933-9401
1200 Suncast Lane, Suite 3
El Dorado Hills, CA 95762
BRE License # NMLS 01193140 - NMLS #283350
www.davisandamaral.com


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