Things To Consider When Buying A House

With the shape of the housing market today, mortgage loans are harder to get and home values are stabilizing but still have a ways to go to get back. Some California homeowners have seen their property drop by over 50%. There’s a lot of uncertainty out there and buyers just don’t know how to get a great deal in the face of so much turmoil. Home buyers, read these tips for some assistance in Buying A House.

In evaluating the value of a piece of residential property, you should be cautious about nearby commercial or industrial properties. Keep in mind that while such properties might be inoffensive (or even vacant) at the moment you look at a nearby house, the future holds no guarantees. You should factor in the possibility that an undesirable, unpleasant or even dangerous business might move in at a later date.

Get Pre-Approved for a Mortgage Before Shopping

One of the most important factors in buying real estate concerns your credit. It is in your best interest to investigate any issues that may be on your credit profile before entering into a real estate purchase. This will avoid any unknown issues that may be lurking in your credit history and save you negative surprises when it comes time to get approved.

To know everything about your new home, spend some time with the previous owners. Ask them questions about all the repairs they have done. If there has not been a lot of repairs, find out if the house needs work, or if it happens to be a relatively new house. If they have carried out many, there might be something wrong with the house.

When buying a home make sure you find out about flooding issues. Some areas are extremely flood prone and flood whenever it so much as rains. This can be vital information if you plan to live there year-round because you don’t want to be constantly flooded. Ask how often the there are floods, how many evacuation routes there are and how often those routes are used.

Check the neighborhood for sex offenders online at the National Sex Offender Public Registry. Knowing if one of these predators lives in the neighborhood that you may move to is important to the safety of you and your family. Check for registered and formerly registered offenders. Taking a minute to look may save your family heartache.

Property Taxes

Once you have found an area you would like to live in, check out things like HOA fees. Are there any special tax assessments or school taxes. If you see a property, don’t ask the real estate agent, go knock on a neighbors door. Tell them you are interested in the house for sale down the street and just wanted to know about the area. Most will open up and give you the best of information.

Assistance is exactly what you need when Buying A House. Get multiple sources of information about the area. Use what you’ve learned here to ensure that you’re always coming out ahead in any real estate deal you make. Buying real estate can be tricky, but it doesn’t have to be if you use the tips above. Got a question about a new home mortgage, we are here to help. Give us a call 877-244-9190.

Understanding the Mortgage Loan Application Process

Getting a new Mortgage Loan can be difficult. Even if you have done it several times you can still find the process complicated and intimidating, particularly when it comes to getting a new home mortgage. Countless qualification documents, unfamiliar terminology and uncertainty serve to temper the fun of buying a new home. But the good news is, Lenders have streamlined mortgage the process.

As soon as the purchase contract is signed, obtaining the financing for the purchase becomes important. If you understand the steps required to pre-qualify for a mortgage, however, much of the stress can be avoided.

Loan Applications Easier Online

You can save plenty of time if your Lender has an Online Application process. Complete the application early in the process.Once you have selected a lender, the next step will probably be a meeting with a loan officer or other lender representative, whose job is to begin the collection of information the lender needs to approve the loan. They will explain the types of mortgage loans available to you, the interest rates and fees for each type and the qualification requirements.

The total cost of a mortgage loan consists of the interest rate on the loan, origination fees, discount points, and miscellaneous other charges. One point is equal to one percent of the amount of the loan and is usually collected at the loan closing, or settlement. The interest rate affects the monthly payment amount, while points affect the amount of cash you must have at closing.

Make An Offer to Purchase

When making an offer to purchase a home, consider offering more “bottom line” money but ask the buyer to pay some of your fees or add in an insurance contract. A 3% Seller contribution is not out of the question. This is because your offer sounds higher to the seller so they will be more likely to accept it; however, you still save money.

When looking to buy your new home pay special attention to the kitchen. The kitchen is usually the center of family activity so this room is one of the most important in the house. Large kitchens are desirable, and so are modern appliances. It should be easy to get to your back yard from your kitchen, this is important for times when you may be grilling out or having outdoor parties.

The loan application form asks for information on the property you are buying, terms of the purchase contract and the employment and financial history of all loan applicants, including your spouse. The lender will verify or not to make the loan, so it is very important to make sure that it is complete and accurate.

Choose your Lender Based on Experience-Not Lowest Rate

You have a choice in a mortgage lender, so look around for the best fit for you. A lot of new buyers make the mistake of just going to their current bank and taking whatever mortgage they offer. Many times the Lender offering the lowest rate is inexperienced and when there is a small issue with the loan, they move on to others and forget you. Choose experience over rate.

You may consider a FHA home loan or even a VA home loan if you are a Vet. The advantage of these loans is an easier approval process and a lower than average interest rate and lower down payment.

The Purchase Agreement

Because the property is security for the loan, the lender will have an appraisal done on the property, and you need to have the following information available:

• A complete copy of the sales contract, including any addendum’s, signed by all parties, showing the full names of the sellers and buyers as they will appear on the new deed, the amount of earnest money deposit and who is responsible for closing costs, origination fees, etc.

The loan officer will want the social security numbers of you and your spouse (or other co-borrowers), age, number of years of schooling, your marital status, number and ages of dependents and your current address and telephone number. If you have lived at your current address less than 2 years, be prepared to furnish former addresses for up to seven years. The lender will pull your combined credit report.

Information and Documents you will need

• Recent paycheck stubs and Federal W-2 forms for two years (some lenders may require full Federal tax returns). If you are self-employed, full tax returns and financial statements for 2 years, plus a profit and loss statement for the current year to date.

When you are obtaining home financing you should understand how the interest is calculated. Your rate could be fixed or it could be adjustable. With fixed interest rates, your payment will usually not change. Adjustable rates vary depending on the flow of the market and are variable.

The loan officer will have you sign a Verification of Employment (VOE) form. This will be sent to your employer to verify your employment and earnings. One will be sent to previous employers if you have been on the job less than two years. Many lenders now use a general authorization form which allows them to verify employment and other financial information on the application.

Assets and Verification of Assets

A detailed listing of your personal assets is required on the loan application form. You will need to have the following information available.

•  Two months of all pages of statements on all bank accounts, checking and savings, and money market accounts, with the name and address of the institution, name(s) on the accounts, account numbers and current account balances.
• Two recent paycheck stubs for all Borrowers

As a note, one of the worst ways to prevent the purchase of a potentially good home is to over analyze the home. Over analyzing property causes you to have doubts about it. When you have doubts about the property, you will begin to second guess yourself and decide against buying something good.

• Current market value of stocks, bonds, CDs and other investments.

• Vested interest in all retirement funds.

Having a high credit score means you will get a better rate. Check to see what your score is and that the credit report is correct. Banks typically don’t approve anyone with a score of less than 600 today.

Make sure to do research regarding prices of homes in your neighborhood. Setting your selling price too high can prevent sellers from even wanting to look at your home. Ask your real estate agent what the typical home in your neighborhood goes for, and set your home in that price range, unless your home is spectacular.

Make sure you have a large down payment saved up. It is always better to put a larger sum down when you get a home mortgage. The more money you have to put down on your house, the lower your payments will be in the future. That means more spending money each month.

As with the Verification of Employment, the loan officer will have you sign Verifications of Deposit (VOD) for each of the institutions (or a general authorization) where you have savings or checking accounts. Differences between the account balances reported by the institution and the balance you give for the loan application have to be reconciled, so be sure you have your correct current balances.

The lender will look for the source of funds with which you will make the down payment and pay closing costs and fees. Gifts from a relative, church, municipality or non-profit organization may sometimes be used, but must be verified in writing. If you are providing less than 5 percent of the sales price, the donor must be a relative and must provide a letter stating the donor’s relationship to you, the amount of the gift and the fact that no repayment is expected.

If you’re buying real estate as an investment, you cannot assume what other people may want. People’s desires change depending on the state of the market, so always opt for low-priced property over property you feel to be more desirable to people. The object is to sell for a profit, not to leave a house sitting on the market for years.

Be realistic when choosing a home. Just because your lender pre-approves you for a certain amount doesn’t mean that’s the amount you can afford. Look at your income and your budget realistically and choose a home with payments that are within your means. This will save you a lifetime of stress in the long run.

Personal Debt to Income

You will be asked to itemize all of your current bills, loans and other debts, including current balances and monthly payments. Debts include automobile loans, credit cards such as Visa, Mastercard and other retail store accounts, finance company, bank a and credit union loans and existing mortgages, including home equity loans. You should be able to give the account or loan number, the monthly payment, the number of payments remaining and the outstanding balance.

Setting a monthly budget is a great way to ensure that you always have enough to cover your mortgage. The last thing you want is an eviction notice, so make sure that you’re taking stock of what you make vs. what you owe, including groceries, insurance payments, energy costs, and other bills.

Because of the particular circumstances surrounding a loan application, the lender may require additional information or documentation regarding you or the property after the application has been submitted for approval. Loan officers make every effort to collect all data at the outset, but cannot foresee every eventuality. Requests for additional information are not necessarily bad omens and your primary concern should be in responding promptly with the information.

After The Loan Application – What Next?

After the loan application has been completed, it will be turned over to the lender’s loan processing department and then to the underwriter, where the decision to approve or reject the loan will be made. Loan processors send out the Verifications of Employment and Deposit and order the credit report, property appraisal and other documents. The time it takes to receive these documents affects the length of time required for approval of the loan. If you are transferring from out of the local community, it may take longer to receive the credit and employment information. Processing times vary from one lender to another, but the loan officer should be able to give an idea of the processing time for your application.

Good Faith Estimate GFE

Within three business days after completing the application, the lender must provide you with a Good Faith Estimate, called a GFE of the anticipated closing costs. It will show costs associated with the loan settlement, such as origination fees, mortgage insurance, title insurance, escrow reserves and hazard insurance.

The best advice we can give you is be patient, work with experience and plan carefully. We are an experienced mortgage lender here to help you get the home of your dreams. We offer an EZ online mortgage approval process and a handy mortgage payment calculator. If you are looking to get a new home loan or even refinance home loan, give us a call 877-244.9190.

Confused About The Home Buying Process?  Let Us Help!

Real estate can be a wise investment if you buy it for the right reasons at the right time. But the Home Buying Process can be difficult. An over saturated market is not the time to buy a house to flip but it can be the perfect time to get that first starter home that you have been saving for. This article can help you to make that decision with confidence.

When you buy real estate you could end up making a nice profit. Some people buy run down homes and fix them up to sell for a higher price. However you must understand that this can take time, money and effort to do. Make sure that you have the skills and/or the money to get a place fixed up correctly to code.

Get Pre Approved for a Mortgage

Investigating the various mortgage options available and determining what you will qualify for are essential when purchasing real estate. Doing homework with your lender is important for getting your perspective on the goals you should be setting for purchasing. Talk to lenders to seek information while avoiding having your credit polled as this can decrease your credit score.

To find a well-maintained property, try looking for a home in the fall. You will be able to see issues that may not have show up during other times of the year. For example, pay close attention to the gutters; if they are full of leaves, it indicates that the seller hasn’t been caring for them properly. This may lead you to question what else on the residence hasn’t been maintained.

When you are in the market to buy a home, do not go looking at the houses that are on the top of your price range first. It is better to look at one in the lower end of your price range. The reason for this is that if you see the more expensive one first, you will always compare the other houses to it.

Buying a New Home

Consider buying a brand-new home in the fall. In many cases builders are beginning to discount their inventory and they may even offer some great incentives around September to make the sales that they need before the end of the year. Prices of these homes that do not sell in the fall will go back up in the spring.

Make sure when you are considering purchasing a home that you think that it is a home that you will be happy in for at least three to five years. It will take you that long to build up the equity in your home to recoup the money so you do not end up financially upside-down.

Hiring a buyer’s agent can be a huge advantage when you are looking to purchase a property. Listing agents must work for the seller of the home, but buyer’s agents work to help you have a quicker, easier transaction. They will look for properties for you and will help you negotiate with the seller.

As previously stated, timing can be everything in buying real estate. You also need to consider what you want to buy and why you want to buy it. The above article can help you to come to the right decision at the right time. Take the time to think it over and do it when you are sure.

We are an Approved FHA home loans, VA home loans and conventional mortgage lender. We find ways to get you mortgage options and look forward to answering your questions. We have an EZ online mortgage approval process and mortgage payment calculator to help you.

Retirement Advice For Your Real Estate!

Retirement should be a time of fun and excitement. You should have the time to pursue personal passions, travel, socialize and spend time with the grandkids. It’s not a time to fret over money issues or social security income. Maybe it is a time to get a reverse mortgage.Use the ideas and tips that follow in this article in both creating your retirement and enjoying it.

An obvious tip in regards to retiring is to make sure you start saving for your retirement. A lot of people make the mistake of not saving for their retirement and then find themselves in a bit of a pickle because they don’t have adequate funds available to them when they’re older.

Open an IRA, Kehoe or 401K  to increase your savings for retirement. This can be beneficial as there are many tax benefits, and is another way to lock in money when retirement comes. This retirement account does not charge you taxes if you were to take money out of it after you turn 60.

When you get a quote for a reverse home mortgage, make sure that the paperwork does not mention anything about PMI insurance. Sometimes a mortgage requires that you get PMI insurance in order to get a lower rate. However, the cost of the insurance can offset the break you get in the rate. So look over this carefully.

Start a savings account while you’re young, and contribute to it regularly throughout life. Even small investments will accrue over time. Your savings will grow as your income rises. When your money resides in an account that pays interest, your money has the chance to grow to provide you with extra money later on.

Refrain from taking early withdrawals from your retirement account. These withdrawals will have substantial penalties, and will take away from the money that you have set aside. Typically, you will be charged a fee of 10% on top of the federal and state taxes that you will pay, reducing your amount by almost half.

Reverse Mortgage

Knowing your credit score is important before trying to obtain a mortgage. The better your credit score, the easier it will be for you to get a mortgage. Examine your credit reports for any errors that might be unnecessarily lowering your score. In reality, to obtain a mortgage, your credit score should be 620 or higher.

Contemplate a reverse mortgage. These mortgages allow you to stay in the house you own and get a loan against its equity. You do not it repay the loan, buy rather the funds are taken from the estate once you die. You can get extra money by doing this.

A good retirement is filled with joy, love and time with others. It should not be about sitting at the kitchen table with a pile of bills and not enough money to pay them. Use every idea this article gave you that you did not know before to both establish a retirement free from money worries and then make sure you keep it that way.

We are reverse mortgage professionals and can answer all your questions. There are many myths about reverse mortgages and you need to know your exact mortgage options. Give us a call at Mortgage Consumer 877-244-9190.

Obama Home Loans Refinance Program

Even if your home is “underwater” you may be able to do a Home Loans Refinance and lower your monthly payments! The Obama Home Affordable Refinance Program (HARP) is a federal government program that enables homeowners with government-backed mortgages to refinance at today’s record low rates. Get qualified today!

HARP refinance is available from mortgage lenders. Most lenders are  able to offer the HARP program to homeowners who may have Mortgage Insurance on their existing mortgage.

Predatory lenders are still in the marketplace. These lenders usually prey on home buyers with less than perfect credit. They offer low or no down payments; however, the interest rates are extremely high. Additionally, these lenders often refuse to work with the homeowner should problems arise in the future.

Introduced in 2009, the program was designed to help homeowners who owed more than their home was worth to refinance into a lower monthly payment mortgage. The federal government broadened refinancing guidelines in November 2011 in order to make more homeowners eligible. Even those who did not qualify in the past might be eligible with today’s HARP:

HARP Refinance

• It is mostly for homeowners owe no more than 125 percent of their home’s worth was eliminated

Get your documents ready before you go to a mortgage lender. You should have an idea of the documents they will require, and if you don’t, you can ask ahead of time. Most mortgage lenders will want the same documents, so keep them together in a file folder or a neat stack

Remember that the interest rate isn’t the most important part of a mortgage. You also have to think about closing costs, points and other incidentals. There are different kinds of loan as well. That is why you have to find out as much as you can about what you’re eligible for.

• Your mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac

• You do not have an FHA, VA or USDA loan

• The current LTV ratio on your home loan must be greater than 80 percent

Knowing your credit score is important before trying to obtain a mortgage. The better your credit history and score, the easier it will be for you to get a mortgage. Examine your credit reports for any errors that might be unnecessarily lowering your score. In reality, to obtain a mortgage, your credit score should be 620 or higher.

• There must be no late mortgage payments in the past twelve months

• No more than one missed mortgage payment in the past 12 months

Are you eligible

Regardless of how much of a loan you’re pre-approved for, know how much you can afford to spend on a home. Write out your budget. Include all your known expenses and leave a little extra for unforeseeable expenses that may pop up. Do not buy a more expensive home than you can afford.

If have been unable to refinance because the value of your home has declined, you may be eligible to refinance through HARP. Fill out our EZ online home loan application to see if you qualify for a HARP refinance loan and get a personalized rate quote.

Organize your financial life

If your paperwork is all over the place and confusing, then you’ll just make the entire mortgage process that much longer. Do yourself and your lender a favor and put your financial papers in order prior to making any appointments.

Never take out a new loan or use your credit cards while waiting for your home mortgage to be approved. This simple mistake has the potential of keeping you from getting your home loan approved. Make sacrifices, if need be, to avoid charging anything to your credit cards. Also, ensure each payment is received before the due date.

The program hit a few initial stumbling blocks. In 2009, when President Barack Obama first announced his plan, he had estimated the initiative would help between 4 and 5 million homeowners attain lower monthly interest payments. However, up until November 2011, the program had only helped a few hundred thousand borrowers refinance their loans. This meant that the home loan program was probably not working.

The program was then rebranded HARP 2.0 after President Obama stated that they would be making key modifications to the program to help a significantly more homeowners. The changes announced in November 2011 included removing the 125 percent loan-to-value (LTV) cap placed on the kinds of mortgages that were previously eligible for a HARP loan. This meant that borrowers who had applied to refinance their mortgages under the original HARP guidelines, but were rejected, may now qualify.

Since the program was enacted in 2009, HARP loan rates have reached all-time average lows repeatedly. This means that many borrowers who have successfully refinanced their loans through HARP have seen their monthly payments reduced. The program is set to expire by December 2015.

Home Loans Refinance tips can save you big money. We are a HARP mortgage lender and can answer all your questions regarding the program. There also may be other options like an FHA home loan or Home Equity loan. Our mortgage experience will find the best solution for you.

If I was Buying a new Home-I Would…..?

So you want to buy a new home and are looking for some advice on things. We are a 23 year Mortgage Lender, and guarantee the following home buying tips will save you not only money but also save you home buying stress.

Get Pre-Approved for A New Home Mortgage

Don’t even think about buying a new home until you have taken the time to get pre-approved for a new home loan. This process could take as little as an hour or as long as months. Don’t be satisfied with just a pre-qualification. In the qualification process, the Lender will just take the information you submit and tell you how much payment you can afford. When you go thru the full approval process, the lender will pull your credit, determine your debt to income or DTI, and tell you if pre-approval for the new home loan is possible. Little things like something showing up on your credit report you paid months or even years ago can be addressed at this time. Have a student loan with a deferred payment? The amount of the debt must be used at 5% of the outstanding balance added to your debt for mortgage qualification. There are many other things that can effect the approval. Let’s say you have an item you have disputed in the past. That item is removed from your credit score as long as it is disputed. In a qualification, your score looks sufficient but in the approval, that disputed item must be undisputed and the resulting FICO score will be used to determine if you are approved. The list of issues is long and only a seasoned mortgage professional can help you.

There are FHA home loans, VA home loans, conventional and many other options to consided in a new mortgage.

Selecting a Real Estate Agent

Never go house hunting without the assistance of a local real estate agent. When you select who will represent you, look at where their “Core” is of homes they have represented in both selling as well as buying. Find someone who is out knocking on doors in the exact neighborhood you want to buy. Consider more than one agent. If the distance between areas you will consider buying a home is considerable, consider having a agent familiar in each area.

Do you need to Sell your Current Home

Many homeowners make the huge mistake of thinking they need the same agent to sell their home that will find them a new home. Unless you are planning to move around the corner, have two different agents, hopefully at different offices. If you need to sell before you buy, you might be able to buy on contingency. Meaning, your purchase goes thru when you sell your current property.

Don’t Let the Real Estate Agent Select Your Lender

Having your Lender associated with the agent you are using to represent the purchase is one of the biggest mistakes we see homeowners make. The agent is good, the Lender is good. But having 2 not associated professionals will get you each person looking out for your best interest. This usually results in quicker closings and lower fees. It’s like having your Doctor tell you where you go to grocery shop. Food and health are associated but it makes good sense to have 2 different connections. Your Doctor for health…your grocer for food choices.

Make a List of What You Want in a New Home

Talk with your family and find out just what your looking for in a New Home. Having an extra bedroom will probably add $10,000 to the price. Having a pool might add $35,000. ect. Determine your budget before you go shopping. Tell your agent your needs and ask for input on prices…again,before you go shopping. Once you are ready to make an offer, ask your agent to find out if the seller will give you some seller concessions. It is common for the seller to contribute up to 3% to your closing cost. If you don’t ask for it, you won’t get it.

Simple Tips To Help You Understand California Home Mortgages

The key to getting California low rate Home Mortgages is doing the right research first. You need to know the advantages and disadvantages of your different mortgage options to make the right choice. That means you have to take the initiate to learn more. The tips in this article are a great start to getting a great California home mortgage. No matter if you want an FHA home loan, a Fannie Mae home loan, an adjustable rate mortgage or a fixed rate mortgage, we have advice for you.

Check Your Credit

Before applying for a mortgage loan, check your credit score and credit history. Any lender you visit will do this, and by checking on your credit before applying you can see the same information they will see. You can then take the time to clean up any credit problems that might keep you from getting a loan.

If your mortgage has been approved, avoid any moves that may change your credit rating. Your lender may run a second credit check before the closing and any suspicious activity may affect your interest rate. Don’t close credit card accounts or take out any additional loans. Pay every bill on time.

Reducing your debt as much as possible will increase your chances of being approved for a mortgage. If you are not in a good financial situation, meet with a debt consolidation professional to get out of debt as quickly as possible. You do not need to have a zero balance on your credit cards to get a mortgage but being deeply in debt is definitely a red flag.

VA Home Loans

If you are a veteran of the U.S. Armed Forces, you may qualify for a VA morgtage loan. These loans are available to qualified veterens. The advantage of these loans is an easier approval process and a lower than average interest rate. The application process for these loans is not often complicated.

Make sure you’re not looking at any penalties when you apply for a new mortgage. Your old mortgage may impose fines for early payment, which can include refinancing. If there are fines, weigh the pros and cons before getting into a new mortgage, as you may end up paying a lot more than you expected, even though refinancing means a lower monthly payment.

Home Loan Options

Be sure to compare the different term options that are available for home mortgages. You could choose between a number of options, including 10, 15 and 30 year mortgage options. The key is to determine what the final cost of your home will be after each term would be up, and from there whether or not you would be able to afford the mortgage each month for the most affordable option.

Keep your job. Lenders look into many aspects of your financial situation and one very important aspect is your employment income. Stability is very important to lenders. Avoid moving jobs or relocating for as long as possible before you apply for a home mortgage. This will show them that you are stable.

As stated above, you have to do some research before you decide on a plan for something as important as your home mortgage. Reading the advice in this article was a great start to learning more about home mortgages. Research your options a little more to make sure you are getting the best mortgage possible.

Get started on your new Home Loan now

Getting a new California home loan can be a challenge. Being prepared before you begin will help you considerably. The same applies for a Refinance home loan. You can get a low rate home loan before the mortgage rates start climbing. Give us a call for EZ Online Application and quick Approval.

Teachers Down Payment Assistance Program

Are you a California Teacher looking for a new home loan.  Great News…the California Housing Finance Agency now has a program that gives Teachers Down Payment Assistance on California Home Purchases.

The ECTP program gives junior loans from $7500 to $15,000 depending on the Teachers Income. And the area which the home is being purchased. The CalHFA program is the perfect assistance to get you into your dream home with little or no money down. The program is for Teachers who have not owned a home in the last 3 years and are thus eligible for the California First time homebuyers program.

There are some eligibility requirements but let us help get you pre-Approved for the program.

The best thing about this program is that Teachers can get into a new home purchase with payments usually lower than rent and begin building equity. It allows them to buy with very little down. If a Teacher gets the Seller to contribute to the closing cost, it provides for buying a new home for almost no money down.

The junior loan or second, it forgiven after a certain amount of time that the Teacher occupies the home as their primary residence.If the home is purchased using a FHA home loan the down payment is only 3.5%.

If you are a California Teacher, use our handy mortgage payment calculator to see what your house payment might be. Down Payment Assistance can be the difference in buying or renting a home for a Teacher.You can complete the application online and receive same day home loan approval.

Gift of Equity

Using a Gift of Equity to buy real estate from a family member is becoming more popular. Most Loan professionals do not know how to do this very complex transaction. We have received numerous questions recently concerning the sale of real estate between family members and whether or not the seller may “gift” equity in the property to the buyer. We have identified the growing trend in the transfer of real estate between family members.

There is a huge interest in the Gift of Equity program from First Time Homebuyers who do not have the required down payment. Both buyers and sellers continue to ask us questions about the program and as we have now completed many of these purchases, we are happy to explain the process to you.

First, is it acceptable to give a “gift of equity” when selling real estate? Yes…when it is to a family member. Let’s first examine the Fannie Mae guidelines associated with a Gift of Equity:

• Both conventional and government underwriting guidelines call for the donor (seller) to be a direct relative of the recipient (buyer). a qualified relative is defined as the borrower’s spouse, child, or other dependent, or by any other individual that is related to the borrower by blood, marriage, adoption, or legal guardianship. Finance or domestic partner is also acceptable.

• Fannie Mae and Freddie Mac both ask for the borrower to contribute 5% of the purchase price from their own funds into the transaction. Beyond the first 5%, the borrower may receive a gift of equity. Some programs designed for first time home buyers may allow a minimum of 3% from the borrower’s own funds. If the gift of equity will contribute more than 20% of the sales price, the borrower does not need to document the use of their own funds.

• FHA  permit 100% of the required down payment (minimum – 3.5%) to be derived from a Gift of Equity.
• Every gift, whether a cash or Gift of Equity, must be supported by an executed gift letter; which outlines the relationship between the borrower and donor with all appropriate contact information as well as documentation for the source of funds being used for the gift.

There may be tax issues with the gift and you should consult your tax professional to get better guidance on this.

What is the Process?

When a Family member wants to buy a property from another relative, it begins with going to a local Escrow company. There the buyer and seller will sign a purchase agreement outlining the selling price and other details. In this agreement, the seller will show a credit of say 20% of the selling price as a Gift to the buyer family member.

The loan professional will give you guidance on exactly what is needed to complete the transaction. The program is usually when a person has seen their kids move on and the house is to large for them. Selling to a family member is a simple solution to help get the person into a property as well as the easiest, lowest cost way for the seller to sell the property.

Mortgage Consumer strives to educate our team of mortgage professionals to remain current on trends that affect the real estate industry and benefit our clients. The Gift of Equity program is but one of the many mortgage solutions we offer prospective buyers.

Valencia Home Loans Lender

Valencia Home Loans. We are the #1 Valencia home loans lender for the 3rd straight year. As a Valencia mortgage bank, we offer experience that will help you and your Valencia Real Estate agent get you into the house of your dreams. If your looking for low mortgage rates Valencia, you have come to the right place. We offer free mortgage advice, free credit report, mortgage tips and low cost mortgage. Our Valencia refinance mortgage offers the best in a Valencia home loan. We also offer home equity line of credit and have a handy Valencia mortgage payment calculator.

Santa Clarita Mortgage Lender 

Are you looking to buy in the area. Santa Clarita homeowners and new home buyers have come to expect nothing but the best in service, Santa Clarita low mortgage rates, and an experienced Santa Clarita mortgage banker that can get you thru the bumps of getting a new Santa Clarita morgage. Being near Soledad Canyon Road, Bouquet Canyon Road, Newhall Ranch Road and McBean Parkway allows us to work quickly to get your home loan completed.

Experienced Local Mortgage Banker

Our 23 years of Santa Clarita mortgage origination makes us one of the most experienced mortgage teams on the west coast. We have helped homeowners get low cost home loans as well and buy Investment properties, get Reverse mortgages and get a Santa Clarita Home Equity loan with Cash Out to pay off other debts or do some Home Improvements. We believe …your loan is the only loan and communicating with you is absolute. We are available to you and your real estate agent 24/7 and welcome your questions. Many of our Borrowers have done several new home purchase loans or refinances with us over the years.

Valencia, Santa Clarita Recommended Real Estate Agents

Based on the experiences of our customers, we are happy to recommend a Santa Clarita real estate agent when we hear good things about them. If you are looking for an experienced Real Estate local agent,We recommend:

No Appraisal Cost- No Points- No Bank Fees

We have some great options when you are looking for a new Valencia home loan or to refinance you Valencia home loan. If you are a Vet, you can get a VA home loan Santa Clarita and if you are a senior, look into a reverse mortgage Santa Clarita.

Maybe your looking for a Valencia cash out mortgage or a low rate Palmdale home loan. With California refinance rates so low , maybe now is the time. Let us give you a mortgage rate quote or use our handy mortgage payment calculator Valencia. If you are a Valencia first time home buyer we are here to get you your loan. We also offer Santa Clarita home loans, Granada Hills home loans & Porter Ranch home loans .