Ron Denhaan, Realtor (949) 290-3263. Orange County real estate specialist.

Orange County Home Buyer Resources

Financing Options

Financing options One of the first steps involved with buying a new home is to discuss financing with a lender. There are many questions you will need to discuss, including how much home can I afford, what types of loan programs do you have, and what will the monthly payments be.  The lender will discuss your financials with you, including how much of a down payment can you make, what is your debt to income ratio, what are your reserves (savings, investments, etc) what is your income and job history, and what are your credit scores. Based on your financial profile, the lender will be able to give you an idea of how much home you can comfortably afford and what the payments will be under various loan programs. 

There are several types of mortgage loans available and you may be familiar with some of these terms:

Conventional Loans (also known as a Conforming loan)

A Conventional loan is a mortgage loan that typically has a traditional, fixed-rate structure. Theses loans are not insured by federal agencies, like the FHA or the VA. A conventional loan is sometimes referred to as a "conforming loan", which is a mortgage that is eligible for resale to Fannie Mae and Freddie Mac. The current conforming limit for loans in Orange County, CA is $625,000. This is an increase from the original ceiling of $417,000.Loans above $625,000 in Orange County are called "jumbo" loans.  There are many conforming loan programs including 15 and 30 year fixed loans as well as a number of adjustable loan options. 

FHA Loans

An FHA loan is a loan that is insured by the Federal Government, thereby limiting the lender's risk. The borrower pays an insurance premium upfront which is approx 1.75% of the loan total. This can be financed directly in the loan amount. The borrower is also required to pay a monthly premium of .55% of the loan amount divided by 12 months. An FHA loan requires a down payment of 3.5%. This money can be a gift, and no reserves are required. FHA loan interest rates are competitive with conventional loan rates, and FHA loans are easier to qualify for than similar conventional loans. FHA loan limits in Orange County are for loan amounts up to $729,500. FHA loans are discussed in detail on one of my following web pages 

Jumbo Loans

Jumbo loans are loans that exceed the conventional loan limit of $625,000. These loans are usually acquired for higher end, or "luxury" properties. Jumbo mortgage loans are a higher risk for lenders. This is because if a jumbo mortgage loan defaults, it is harder to sell a luxury residence quickly for full price. Luxury prices are more vulnerable to market highs and lows. That is one reason lenders prefer to have a higher down payment from jumbo loan seekers. Jumbo home prices can be more subjective and not as easily sold to a mainstream borrower, therefore many lenders may require two appraisals on a jumbo mortgage loan. The interest rate charged on jumbo mortgage loans is generally higher than a loan that is conforming, due to the slightly higher risk to the lender. 


Estimating your monthly mortgage payments 

Estimating monthly payments If you would like to try some "what ifs" on what your mortgage payments might be under various purchase scenarios, you may use the mortgage loan calculator web page, or the mortgage calculator widget below. The loan tool will bring up your results in a separate browser session. Your actual payments will of course vary, depending on the final loan program and your qualifications.
Mortgage Calculator.org
Home Value: $
Loan amount: $
Interest rate: %
Loan term: years
Start date:
Property tax: %
PMI: %
Output parameters


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Help for first time buyers

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Congratulations on your decision to purchase a home! If you are looking for assistance with your first home purchase, looking to up-size or downsize, or are looking for an investment property, you have come to the right place!  Please call me to arrange a consultation with my team. We can help you all phases of your purchase, from showing you your home to referring you to financing.

 

   Ron Denhaan

Ron Denhaan - Realtor

Realty One Group

(949) 290-3263

Ron@rondrealestate.com

BRE# 01728866

 

Ron Denhaan, Realtor

 


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