Rancho Cordova

What You Need to Know About Qualifying for an FHA Loan

April 24, 2023 by Mortgage Consultants Group

FHA loans can be an excellent option for prospective homebuyers who want to achieve their dream of homeownership but face financial barriers. With lower credit scores and down payment requirements than traditional mortgages, FHA loans provide an accessible path to homeownership, especially for first-time buyers.

This article will cover the basics of FHA home loans, how they work, and who qualifies. We’ll also discuss what you must do to get approved for an FHA mortgage.

Understanding FHA Loans

FHA loans are government-backed mortgages that are designed to help low- to moderate-income borrowers with less-than-perfect credit scores. These loans are insured by the Federal Housing Administration, meaning lenders are more likely to approve applicants who might otherwise be considered too risky.

FHA loans have lower down payment requirements and more flexible credit score standards than conventional mortgages, making them an excellent option for first-time homebuyers and those with limited financial resources. However, it’s important to understand an FHA loan’s specific terms and conditions before applying, as they can vary depending on the lender and the borrower’s circumstances.

Credit Score Requirements

Credit score requirements are essential to get approved for an FHA loan. Here are some details explaining credit score requirements for FHA loans:

Minimum Credit Score: To qualify for an FHA loan, you must have a credit score of at least 580. Borrowers that have lower credit score than this may still qualify for an FHA loan but must make a higher down payment of at least 10%.
Credit History: Lenders will also review your credit history to determine your creditworthiness. A history of late payments, collections, or bankruptcy may affect your ability to qualify for an FHA loan.
Credit Utilization: Your credit utilization ratio, the amount of credit you use compared to your total credit limit, can also affect your credit score. You should keep your credit utilization below 30% to maintain a good credit score.
Credit Reporting: It’s important to ensure your credit report is accurate and up-to-date. You can request a free credit report from each of the three major credit reporting agencies once a year.
Improving Your Credit Score: If your credit score is lower than the minimum FHA loan requirement, you can improve it. These include paying down debt, making timely payments, and disputing errors on your credit report.

Where to Get FHA Loan?

FHA loans can be obtained from various sources, including mortgage lenders, banks, credit unions, online lenders, and government agencies such as HUD. FHA-approved mortgage lenders are the most common source of FHA loans and can help borrowers understand eligibility requirements, apply for a loan, and guide them through purchasing a home. Banks and credit unions also offer FHA loans but may have additional requirements or restrictions.

Online lenders have become increasingly popular and may also offer FHA loans, but it’s important to research them carefully to ensure they are reputable and licensed. Government agencies such as HUD offer FHA loans through their housing programs, providing additional options for borrowers. When looking for an FHA loan, it’s important to shop around and compare offers from multiple lenders to find the best terms and interest rates.

Conclusion

Understanding FHA loans and how they can benefit you is important if you are a first-time homebuyer with limited financial resources. FHA loans offer more flexible credit scores and down payment requirements than conventional loans, making them an excellent option for those with low credit scores or limited savings. By shopping around and comparing offers from multiple lenders, you can find the best terms and interest rates for your financial situation and homeownership goals.

Contact Your Local Mortgage Specialist Today

Ready to take the next step towards homeownership? Contact Mortgage Consultants Group today at (916) 669-1682 to learn more about your eligibility for an FHA loan. With a lower credit score and down payment requirements, an FHA loan may be the perfect financing option to achieve your dream of owning a home.

CalHFA Dream For All Down Payment Assistance Goes Live This Month

March 21, 2023 by Mortgage Consultants Group

California homebuyers will be delighted to learn that the Dream For All Shared Appreciation Loan Program for down payment assistance will be available as of Monday, March 27^th, 2023.

What is the Dream For All Shared Appreciation Loan Program?

The Dream For All Shared Appreciation Loan Program is an income-based program through California Housing Finance Agency (CalHFA) that provides down payment assistance of up to 20% to qualifying homebuyers.

This program was established through the 2022-23 State Budget. Originally, the program would only have provided down payment assistance for 17% of the purchase price of a home. So, it is a big deal that it will provide up to 20%.

Dream For All Shared Appreciation Loan Highlights

Required First Mortgage: Dream For All Conventional First Mortgage
Dream For All Shared Appreciation Loan
Amount: Up to 20% of the sales price or appraised value
(whichever is less)
Income Limits: Income cannot exceed CalHFA Income Limits
Minimum CLTV: 70%
Maximum CLTV: 105%
Layering with other CalHFA Programs: Cannot be combined with CalPLUS ZIP or
MyHome

If you qualify for down payment assistance, it may mean you can:

Buy a home sooner than you expected.
Afford more home.
Potentially avoid paying for mortgage insurance.

Buy a Home with Down Payment Assistance Now

During your consultation, we can help you figure out if you qualify for a Dream For All Shared Appreciation Loan. We can also give you other recommendations for how you can afford your down payment on a new home.

Please contact us today at (916) 669-1682 to schedule your consultation. We work with homebuyers in Rancho Cordova, Gold River, and throughout Sacramento, El Dorado, Placer, San Joaquin and Stanislaus Counties and throughout the states of California and Idaho.

First-Time Home Buyers: 6 Tips for Success in 2023

March 13, 2023 by Mortgage Consultants Group

Navigating the housing market can be overwhelming, especially if you’re a first-time home buyer. With so many steps, decisions, and considerations involved, it’s essential to be prepared for the homebuying process. Whether you’re planning to buy a home in California or refinance your existing property, the following tips can help you enter the market ready to make a purchase.

Tips to Purchase a Home

Research Your Options. Before you can commit to a home purchase, it’s essential to be aware of your options. Many home buyers don’t take into account the additional costs associated with buying a home, including closing costs, fees, and taxes. Additionally, buyers should consider their financing options, as well as research neighborhoods they’d be comfortable living in long-term.

Work with a Real Estate Professional. Working with an experienced real estate agent can be a beneficial decision. This can make the process much easier, as your agent will already have knowledge on neighborhoods, prices, and home details. Once you have a real estate agent, they’ll be able to help you find the home that’s best suited for your needs.

Prepare For Closing Costs. You must also be aware of the closing costs associated with buying a home. This includes taxes, title insurance, and other fees that can add up quickly. Being prepared for these costs will help you budget accordingly.

Create a Home Buying Plan. Creating a home buying plan is essential for anyone looking to buy a property. This plan should include your budget, desired location, and the type of home you’re looking for. From applying for a home loan in California to negotiating the best deal, a home buying plan will help guide you through the entire process. This is crucial for first-time home buyers since they may not be aware of the different steps involved in the home buying process that can easily overwhelm anyone.

Make Strategic Offers. When submitting an offer on a home, it’s important to make strategic offers that are within your budget. Do your research to determine the home’s price range and base your offer on that. Additionally, consider offering above the asking price or making contingencies. You should also consider if there are any contingencies that you’d like to include in the offer. Doing this can help ensure that you’re not overpaying for the home or getting stuck with costly repairs.

Prepare for Closing Costs. Closing costs vary by state but generally include lender fees, appraisal fees, title search fees, and attorney’s fees. You need to budget for these costs, as they can add up. Many first-time buyers don’t factor in closing costs, so to avoid unexpected expenses, do your research beforehand.

Buy a Home in Rancho Cordova

Purchasing a home can be both an exciting and intimidating experience. If you’re a first-time home buyer, follow all these tips to ensure a smooth and successful purchase in 2023. Doing research on the home’s market value, budgeting for closing costs, and making strategic offers are all important steps in the home buying process. With these key tips, you can navigate through the home buying process with ease. Trust only Mortgage Consultants Group to help you make your dream of home ownership come true. Our team of experienced mortgage professionals are here to help you find the best mortgage product for your needs, from conventional loans to FHA or any first-time home buyer loans. We’ll also walk you through the entire process, from pre-qualification to closing. Contact us today to get started!