San Mateo Mortgage Blog

Webinar: Guide to the Federal Home Buyer Tax Credit – Not Just for San Mateo First Time Home Buyers Anymore

Chris Williamson — Thu, 12 Nov 2009 12:10:05 +0000

Date/Time: Monday November 23, 2009 at 7pm

As you read in a previous post here at the San Mateo Mortgage Blog, the federal home buyer tax credit was recently expanded and extended to include not just San Mateo first time home buyers, but trade up home buyers as well. If you are considering buying a home in San Mateo County, this federal home buyer tax credit is something you should keep in mind.

What Aspects of the Home Buyer Tax Credit Will Be Covered?

To help San Mateo County home buyers wade through the details of the federal home buyer tax credit, I will be hosting a webinar on Monday November 23 at 7pm. I will go through the details of the plan, including the new rules, who is eligible and how you can get the tax credit.

How current San Mateo County home owners can qualify for a $6,500 credit
Extensions for certain members of the Military to 2011 will be explained
The new San Mateo County Income and Purchase Price Limits
The deadline to purchase a San Mateo County Home and other timelines you must follow to qualify

Sign Up Information

To sign up for this webinar, visit the webinar registration page.

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Chris Williamson is a Mortgage Advisor with Mortgage California specailizing in San Mateo Mortgage.

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Federal Home Buyer Tax Credit Not Just for San Mateo First Time Home Buyers Anymore

Chris Williamson — Thu, 12 Nov 2009 12:00:14 +0000

The $8,000 federal home buyer tax credit for San Mateo first time home buyers, which was set to expire on November 30, 2009 was extended to the first half of 2010 (now set to expire on June 30, 2009) and now includes San Mateo County home buyers who have owned a home in the past.

Why Will More San Mateo First Time Home Buyers Qualify?

The first time home buyer credit was extended virtually intact, with one key improvement: income limits were increased so more San Mateo first time home buyers now qualify.

What Home Buyer Tax Credit is Available for Current San Mateo County Homeowners?

San Mateo County home owners who owned a primary residence and have lived in their homes for a consecutive period of at least 5 of the last 8 years will qualify for a $6,500 federal tax credit.

When is the Deadline to Purchase a San Mateo County Home?

All homes must be in contract by April 30, 2010 and close by June 30, 2010 to receive the credit. If San Mateo short sales are in your home buying strategy, start as early as possible to ensure they close on time. Even if you are in contract by April 30, 2010 and don’t close before June 30th, you will not receive the credit.

Higher Income Limits in Effect Making More San Mateo County Home Buyers Eligible

Single tax payers who earn up to $125,000 are eligible for the total amount of the credit. Those who earn between $125,000 and $145,000 will get a partial credit. If you make more than $145,000 you will not be eligible to receive the federal home buyer tax credit.

Joint filers who earn up to $225,000 combined are eligible for the total amount of the credit. Those who earn between $225,000 and $245,000 combined will get a partial credit. If you make more than $245,000 combined you will not be eligible to receive the federal home buyer tax credit.

Maximum Purchase Price for San Mateo County Homes

Qualifying San Mateo first time home buyers and home buyers who have owned homes can purchase a home up to $800,000 and still qualify for the new federal home buyer tax credit.

Want to Learn More About How to Use the Tax Credit to Buy a Home in San Mateo County?

On Wednesday, November 23rd at 7pm, I will be hosting a webinar to explain the nuances of the credit, who qualifies and much more. For more information visit the Federal Home Buyer Tax Credit webinar page. To sign up visit the webinar registration page.

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Chris Williamson is a Mortgage Advisor with Mortgage California specailizing in San Mateo Mortgage.

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Low Down Payment Loan Program for San Mateo County – Only 0.5% Down Required

Chris Williamson — Wed, 11 Nov 2009 23:02:57 +0000

0.5% Down Payment, Really?

If you thought the era of low down payment loan programs was over, think again! Home buyers have had access to FHA financing with a minimum 3.5% down in San Mateo County, but now home buyers have another low down payment loan option. This program is called the FHA California Homebuyers Fund Access loan program.

What is the CHF Access Low Down Payment Loan Program?

The California Homebuyers Fund and is sponsored by the California Rural Home Mortgage Finance Authority or the CRHMFA for short. The Homebuyers Fund, which ties in with the FHA Financing Program, was set up to serve Santa Clara and San Mateo County home buyers who can afford a monthly mortgage payment but do not have enough funds for a substantial down payment or closing costs.

How Does this Low Down Payment Loan Program Work?

The FHA CHF Access program allows a borrower to purchase a San Mateo County home with a down payment as little as 0.5% of the purchase price. You will receive an FHA first mortgage for 96.5% of the purchase price and a second mortgage through the California Homebuyers Fund program for 3% of the purchase price. This leaves you to come up with the remaining 0.5% of the purchase price, which can be paid through gift funds from family members. (Before accepting any gift funds, read my previous post How to Accept Gift Funds from Family.)

What Might a Purchase Look Like?

Purchase Price	$500,000
First Loan	$482,500
Second Loan	$15,000
Down Payment	$2,500

First Mortgage: $482,500; FHA 30 year fixed at 5.5% (based on today’s interest rate)

Principal and Interest payment	$2,739.58
Monthly Property Taxes	$520.83
Homeowner’s Insurance	$65
Monthly Mortgage Insurance	$221.15

Total Monthly Payment of First Mortgage	$3,546.56

Details on 2nd Mortgage: $15,000; CHF Access 15 year fixed at 8.25%

Principal and Interest Payment	$145.52
Total Monthly Mortgage Payment	$3,692.08

This 0.5% minimum down payment can be paid through gift funds from a family member and like all FHA loans, the seller can pay up to 6% of the purchase price to cover closing costs. With the California Homebuyers Fund Access Low Down Payment Loan Program you can realistically purchase a home with little or no funds of your own.

Are There Any Restrictions for this Low Down Payment Loan Program?

Yes, there are income restrictions. You have to fall into the low-to-moderate income limits for each county.

What are the Income Limits for San Francisco, Santa Clara and San Mateo County?

County	Income Limit
San Mateo	$116,160
San Francisco	$116,160
Santa Clara	$123,000

Looking to Purchase in Another California County?

We loan all up and down California. If you’re looking for the limits for another county, just email us at info[@]SanMateoMortgageBlog.com and we’ll send it over to you.

Do You Qualify for this Low Down Payment Loan Program?

To find out if you qualify for this low down payment loan program, or want more information give me a call at (650) 520-0915 or send me an email at info[@]SanMateoMortgageBlog.com to set up a free, no obligation phone or in person consultation.

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What is a Genuine Pre-Approval and How Long is It Good For?

Chris Williamson — Mon, 09 Nov 2009 22:31:08 +0000

This is one question I get from a lot of my borrowers when they start the pre-approval process.

Before I give you the answer, we will first start with what a “genuine” pre-approval is and why you need one.

What is a “Genuine” Pre-Approval?

A genuine pre-approval verifies 3 financial components:

Credit
Income
Assets

The following documentation is needed to obtain a genuine pre-approval.

Credit

We will need to run a credit report to find out your credit score and your continuing liabilities. Your continuing liabilities (ie….credit card payments, car loans, equity lines, student loans, etc….) and your credit score will determine what loan programs are available to you and will be a determining factor in how much of a mortgage payment you can afford on a monthly basis.

Income

We will verify your income by reviewing:

Your pay stubs covering one full month. Your pay stubs will need to be computer generated and show your Year to Date income.
You will need to provide your past 2 years of W-2’s (for 2009: you will need 2007 and 2008’s W-2s)
Tax returns for the past two years (for 2009: you will need 2007 and 2008’s returns)

Verifying your income will determine your maximum loan amount and what monthly mortgage payment you can afford at comfortable level.

Assets

To substantiate your assets:

Last 2 months bank statements from your checking, savings, investment and retirement accounts

Your assets will determine how much you have available for down payment, closing costs and any reserves required by the lender.

Why Do You Need a Genuine Pre-Approval?

When you have a genuine pre-approval, you are essentially a cash buyer to a seller. Most seller’s agents will call the buyer’s lender to verify the validity of the pre-approval letter. They will ask questions like “Have the buyer’s assets, income and credit been verified and substantiated?” If the answer to that question is no (and it is with most “pre-approvals” issued today), you have just become a liability to the seller because you have not been pre-approved for the loan. And, if there are any other interested parties making an offer on their house with a genuine pre-approval, likely they will chose them because they know that borrower can get the loan.

Remember, the key to successful home buying is to find a loan first and then find a home.

How Long is a Pre-Approval Good For?

How long your pre-approval is good for is lender specific, but on average it’s about 60 days.

What Happens if You Don’t Find a Home in 60 days?

If you don’t find a home and close a loan in 60 days, this doesn’t mean you have to start the pre-approval process over again. It simply means you’ll have to update your file. You will have to provide updated pay stubs and bank statements. Also and depending on the lender, they may have to pull another credit report. As long as your situation has not changed, (i.e….a drop in income, additional debt or a substantial negative changes in your assets) your pre-approval can be reissued easily.

Remember, each lender has their own requirements when it comes to the expiration of a pre-approval so make sure you have this discussion with your Mortgage Advisor.

Ready to Get Started with the Genuine Pre-Approval Process?

If you’re ready to get started with a genuine pre-approval, contact me at info[@]SanMateoMortgageBlog.com or (650) 520-0915 to schedule a free, no obligation consultation. If you’re ready to go ahead and start the application process, visit our secure online application.

Think You Have Something Other Than a Genuine Pre-Approval and Want a Second Opinion?

We’d be happy to review what you’ve received from another lending institution and give you a second opinion. If you’d like an expert, no pressure second opinion, contact me at (650) 520-0915 or by email at info[@]SanMateoMortgageBlog.com and we can schedule a time to go over what you have. If what you have is a genuine pre-approval, we’ll tell you and send you on your way!

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Webinar: Financing a Condo in San Mateo County

Chris Williamson — Wed, 04 Nov 2009 21:29:40 +0000

Date/Time: Monday November 16th at 6:30pm

The Department of Housing and Urban Development announced effective December 7th 2009 stricter underwriting guidelines will be required to approve condominiums in San Mateo County. In order for FHA or Fannie Mae (two of the primary loans consumers choose) to approve the condominium for financing, the entire complex will have to be approved by HUD. Currently, condominiums can be approved on a one by one basis. In a few weeks, the health of the entire complex will be highly scrutinized before Fannie Mae or FHA will lend.

What Does this Mean to San Mateo County Home Buyers?

It has just become much harder to finance a condominium in San Mateo County
Longer time periods required for complex approval – may not be realistic to close in 30 days
You must be pre-approved before you enter into a contract – find a loan first, then find a home
New rules are not flexible – if you need a loan, you’ll need to play by them
Some complexes may not be approved – don’t waste your time or money chasing something that will never come to fruition
The entire complex needs to be approved by HUD, not just your unit – no exceptions
You need to work with condominium specialists to help guide you through the transaction – both on the real estate side and the financing side

Why Should You Care?

If you are considering purchasing a San Mateo County condominium in the next several months, your transaction will be impacted as these new rules are implemented. There are several things you can do to front load the approval process. By preparing early, you can minimize problems, minimize money spent and most importantly, not lose the condo you really want.

What Will You Learn During this Webinar?

What are the new guidelines and how they will affect your San Mateo County condominium purchase
What does it mean to be pre-approved before you enter into a contract
What you can do to prepare for the stricter financing guidelines and increase the changes of getting the San Mateo County condo you really want
How you can minimize out of pocket costs during the buying process
How to determine which complexes will never be approved so you don’t waste your time chasing a fantasy
Why it is more important than ever to work with Realtors® and Mortgage Advisors who are San Mateo County condominium experts

Registration Info

To register for this webinar, which will be held on Monday, November 16th at 6:30, please visit our webinar registration page.

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Shop for a San Mateo Mortgage Advisor First to Get the Best Interest Rate

Chris Williamson — Tue, 20 Oct 2009 04:09:51 +0000

In a recent home buyer class, an attendee asked how their credit score would be affected if they spoke with multiple lenders and they each pulled a credit score.

My Question Back to Them….

Why are you having multiple lenders pull your score?

Their Answer……

They want to see what lender has the best rates and a lot of the lenders they have spoken with want to pull their credit first.

Initially, Interest Rates Are a Meaningless Number

When you are beginning the loan process or even taking that next step to pre-approval, the honest fact is, today’s rates are really not that valuable to you. The reason…rates are meaningless until you are ready to lock the rate. With a purchase, you can’t lock a rate until you have an accepted contract and are ready to move forward with a transaction.

There Will Always Be a Lender that Can Beat Another Lender’s Rate…How?

In the early stages of the loan process a lender’s rates are just numbers. There is always a lender out there that can always beat another lender’s rate. The reaso…there is no commitment on the lender’s part. When you call a lender and ask for their rates, they know you are shopping so most will quote you the lowest rate available to a borrower with a perfect loan application because it’s the only way a lender will stay in the game with a rate shopper. The hopes are that you will choose them and then they can make the adjustments later.

What Happens When You Call Multiple Lenders Asking for Their Rates?

If you call around for interest rates and the lender you speak to says “these are the rates today, but you may not qualify for these rates based on your total financial package” they are telling you the truth. Interest rates can and do vary based on your credit score and income. If you call another lender, or you talk to your friend and they say XYZ bank will give me 3.5% (ask them if they have already locked their rate), this may not be the rate for you. That lender will have to verify your credit and income and by then, even if you could qualify for this rate, it will likely not be available any longer. But, the lender who quoted you a teaser rate without knowing your financial situation got you hooked because they quoted you the lowest rate and you threw out all your other loan applications thinking you’d found the golden ticket. In the end, you’ll end up paying more.

When Mortgage Shopping, Interest Rates Aren’t the Be All End All

Another thing to keep in mind… interest rates are not the only fees you’ll be paying. Someone may be able to quote you a lower interest rate, but that lower rate could come with greater fees. In this case, the lowest interest rate possible may not be in your best interest.

Shop for a Mortgage Advisor with a Variety of Loan Programs Not the Rate

How do you shop for low interest rates? Shop for a mortgage professional who has access to a wide variety of loan programs and who will shop for you to get the lowest interest rates when you get an accepted contract instead of calling lenders and asking for today’s rates. Having a mortgage professional you trust, feel confident in and feel comfortable with is a lot more valuable than someone that can spew rates at you. Remember, when you are in contract and time deadlines are in place, you need to have someone that can get the job done, not just empty promises of low interest rates.

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Using FHA Financing to Finance a San Mateo Condo? Get Your Lender Involved Early

Chris Williamson — Wed, 14 Oct 2009 22:17:10 +0000

I always preach when it comes to the home buying process, you need to get your loan professional involved early. This becomes even more critical when you usnig FHA financing to buy a townhome or condo in San Mateo County. Why? The complex you chose may not be FHA approved. FHA and HUD have their own list of approved condo complexes for San Mateo County. If your complex is not on the list, your lender has some work to do.

San Mateo County Condo Not on the FHA Approved List?

If your complex does not show on the FHA approved list the lender will have to do a spot approval. The spot approval is not only for your unit alone, but for the entire complex.

Requirements for Complex Approval

Here are the requirements for complex spot approval:

Condominium complex must consist of 2 or more units.
No more than 25% of the complex can be used for commercial purposes.
No more than 10% of the units may be owned by one investor.
No more than 15% of the total units can be delinquent in their HOA dues.
At least 50% of the total units must be sold.
At least 50% must be owner occupied.
For projects with 3 or less units, no more than 1 unit can be encumbered by FHA financing. Projects of 4 or more units will have no more than 30% of the total units encumbered by FHA Financing.
The reserve study must be no more than 12 months old and must show the project is at least 60% funded.

Work With a Mortgage Professional Who Understands FHA Condo Requirements

Using an FHA home loan to finance your San Mateo County condominium does have its advantages, but you need to make sure you are working with a San Mateo mortgage professional that understands the FHA condo requirements. If a lender needs to perform a spot approval, it can add an additional 2 to 4 weeks to the loan process. Remember, always get your loan professional involved early.

Financing a Condo in San Mateo County?

If you plan to finance a condominium in San Mateo County at some point in your future, give me a call at (650) 520-0915 or email me at info[@]SanMateoMortgageBlog.com for a free, no obligation consultation. We’ll take a look at your financial situation and help you determine which loan program is right for you.

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2009 FHA Loan Limits in San Mateo County

Chris Williamson — Fri, 25 Sep 2009 22:44:46 +0000

What is an FHA loan?

For those of you who don’t know what an FHA loan is, it is a loan insured against default by the Federal Housing Administration (FHA). FHA insures the lender against default by the borrower, which means FHA will pay the lender back should you default. This insurance encourages lenders to make larger loan amounts to more people since the risk for them is very low.

What are the Main Benefits of an FHA Loan?

The main benefits to an FHA loan are:

Low down payment (3.5%) required
Easier to use gift funds for down payment
Easier to qualify
Credit requirements lower than most programs

Is FHA Financing Only for First Time Buyers?

No. Almost anyone can qualify. There are not any income requirements, but there are limits on the loan amounts. You need to have decent credit to qualify, but it doesn’t have to be great.

What are the 2009 FHA Loan Limits in San Mateo County?

In high cost areas, which include San Mateo and Santa Clara County, the most money you can borrow with an FHA mortgage loan are:

Units	Max Loan Amount
1	$729,750
2	$934,200
3	$1,129,250
4	$1,403,400

These are temporary increased figures and may go back down at the end of 2009.

Why You May Decide Against an FHA Loan?

If you need to borrow more than the loan limits, FHA won’t work for you. If you have more than 3.5% available for a down payment, you’ll likely be able to find better financing options provided you have good credit. Also, FHA requires an upfront mortgage insurance premium, which is 1.75% of the loan amount ($12,770.63 for a loan amount of $729,750). This upfront premium can be paid upfront, negotiated and paid for by the seller or you can finance this into the loan. You will also have a monthly mortgage insurance payment on top of your principal and interest payment.

Considering an FHA Loan?

We’ll sit down with you and review your financial goals to determine whether or not an FHA loan is the best option for you. Call us at (650) 520-0915 or send us an email at info[@]SanMateoMortgageBlog.com to schedule a free, no obligation consultation.

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FHA Streamline Refinance Guidelines Changing in 2010

Chris Williamson — Wed, 23 Sep 2009 01:10:01 +0000

New FHA Guidelines for Streamline Refinance in 2010

Under today’s 2009 FHA streamline refinance guidelines, homeowners with FHA mortgage loans are able to lower their monthly mortgage payment when FHA reduces the interest rate. Today’s guidelines allow homeowners to refinance without an appraisal or verifying income and assets with fast turnaround times. Even homeowners with low credit scores and no jobs are eligible. FHA figured since they were insuring the mortgages to begin with, helping homeowners lower their monthly mortgage payment which in turn should lower their risk of foreclosure.

What’s Changing with FHA Streamline Refinances in 2010?

In a letter from The Office of Housing and Urban Development dated September 18, 2009, the guidelines for 2010 FHA streamline refinances, effective January 1, 2010, are changing drastically. The biggest changes to the FHA streamline refinance are:

FHA homeowners must be employed when they submit their FHA streamline refinance loan application
FHA homeowners will be required to verify assets needed at closing
FHA homeowners must have a full appraisal done in order to add “roll-in” closing costs to the refinance
The maximum mortgage amount for a streamline refinances without an appraisal cannot exceed the outstanding principal balance and the new upfront mortgage insurance premium
For streamline refinances with an appraisal, discount points (buying down the interest rate) can no longer be rolled into the new mortgage

2009 Streamline Refinance vs. 2010 Streamline Refinance

2009 Streamline	2010 Streamline
No appraisal	Appraisal is recommended
No maximum loan-to-value	Max loan-to-value to 97.75%
No asset verification	Assets verified
No income verification	Income verified
Low credit scores ok	Higher credit scores required
Quick closings	No quick closings

What Does this Mean to a San Mateo Homeowner with an FHA Loan?

If you currently have an FHA loan, you should explore whether or not it would be beneficial for you to do a streamline refinance in 2009 before the guidelines change. Start this as soon as possible to make sure you can take advantage of the 2009 FHA streamline refinance guidelines.

How Do I Determine Whether or Not I Would Benefit?

With some basic information about your FHA loan, we’ll be able to help you determine whether or not you’d benefit from a 2009 FHA Streamline Refinance. If you won’t benefit, we’ll tell you. Then, we’ll put your information into our loan analysis software and when we can help you, we’ll call you. No need for you to monitor the San Mateo mortgage market.

Are you a San Mateo County homeowner with an FHA home loan? Give me a call at (650) 520-0915 or send me an email at info[@]SanMateoMortgageBlog.com with your loan information and we’ll tell you if you can save money with a 2009 FHA Streamline Refinance.

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2009 San Mateo County Conforming Loan Limits

Chris Williamson — Tue, 15 Sep 2009 00:08:50 +0000

A conforming loan is a loan that meets Fannie Mae and Freddie Mac’s uniform national standards.

Who Are Fannie Me and Freddie Mac?

Fannie Mae and Freddie Mac are governmental organization that purchases and secures residential mortgage loans from lending institutions.

Why, you might ask?

Fannie Mae and Freddie Mac buy loans from banks and lending institutions, like Mortgage California, so these institutions can continue to loan money to consumers. Fannie and Freddie don’t want to be out on the front lines selling mortgages to consumers. Instead, they prefer to buy packages of residential mortgage loans that meet their criteria from banks and other lending institutions and service the loans once they are in place.

What are the Guidelines?

Fannie Mae and Freddie Mac have debt-to-income ratio limits and documentation requirements. Lenders that want to sell their loans to Fannie or Freddie must follow these guidelines, otherwise they will not be purchased. They also will only buy loans up to a maximum loan amount, which is set based on October to October median price changes.

What are the Loan Limits for San Mateo County in 2009?

No. of Units	Conforming Loan Limit
1	$729,750
2	$934,200
3	$1,129,250
4	$1,403,400

These loan limits also apply in Santa Clara County in 2009.

What Happens If I Need a Loan Above This Limit?

You would need what we would consider a Jumbo loan. A jumbo loan is anything above the conforming loan limit. Sometimes these loans can come at a slightly higher cost to consumers (between ¼ and ½ percent) because they are more difficult for a bank or other lending institutions to sell on the secondary market. (Remember, Fannie Mae and Freddie Mac only buy conforming loans.)

How Do I Know Which Loan Program is Best for Me?

Because every person’s financial situation is different, it is best to sit down with a San Mateo Mortgage Advisor and go through your current financial picture and your short and long term financial goals. They will help guide you towards the best decision for your particular financial situation.

Need Help Getting a Loan in San Mateo County?

Give me a call at (650) 520-0915 or send me an email at info[@]SanMateoMortgageBlog.com and we can set up an in person or phone consultation. We’ll review your current financial situation and recommend some programs that would work best for you.

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