Knowing all facts about home loans in Bonsall or anywhere in California is a must unless you like getting tricked or scammed.
Know that houses in this state are just too expensive, and this was something you had embraced for a long time.
And the last thing you want is to let thieves posing as realtors and lenders to take a bite at you.
Protect yourself, and become an expert when it comes to real estate laws that can make your buying process safer and smarter. Know the laws that can give you a disadvantage.
We may not be able to list all the things you need to know, but we’ll tell you the things you must learn about the mortgage industry in this state. Here are the mortgage facts you should know.
We know how excited you must be finally a few steps closer to realizing the American dream!
Living in California—maybe in Golden State—is fascinating. It has lots of amazing beaches and scenic views.
And when it comes to jobs, endless career opportunities await you.
But let’s get back to reality and discuss the mind-blowing facts about home loans.
You must be worried about your credit score not being enough to get approved for a home loan. Well, don’t!
This is especially true if you’re applying for an FHA mortgage loan. Having a credit score of 620 is enough to be qualified.
Most people don’t know this, but there are many ways where you can take a break from your mortgage payments.
Most lenders offer forbearance, which is a temporary postponement of your mortgage payment. They do that to avoid foreclosure.
You may be eligible for this option depending on the severity of your situation.
It is better to close the deal by end-of-month instead of closing at start-of-month.
This is because you might end up paying more prepaid interest, which is due at closing.
So make sure to choose your closing date on or before the month ends.
Make sure to take the time to search for your new house before you decide on closing with a mortgage lender.
Each mortgage lender charges different closing costs and other fees, so it’s better to search for the best deal to save you a lot of money.
No matter how a lender promotes a no-cost closing, don’t fall for it.
Lenders tend to include the closing cost into the loan without you knowing it. Otherwise, they may charge a higher interest rate — which costs you more than you anticipated.
Of course, we wouldn’t leave you out with just that. Here’s some bonus content about FHA and loans in general!
Federal Housing Administration loan is a type of loan insured and approved by an FHA-approved lender.
This type of loan is perfect for borrowers that have low and moderate-income.
FHA loans require the least down payment and lower credit scores compared to other conventional loans.
There are different types of FHA loan programs that you should know:
It’s hard to save up for a down payment and pay monthly mortgages, not including the costs for improvements yet.
This is why some people opt-in renting instead, and you can’t settle like that forever!
Most people find FHA loan programs more beneficial than traditional home loans.
This is the perfect program for you if this is your first time purchasing a house or making some upgrades and have a lower credit score.
However, FHA programs have their downsides, too. One of them is the Mortgage Insurance Premiums (MIP), wherein you have to pay 1.75% of the total loan amount upfront.
You also have to pay an annual premium, which is around 0.85% of your loan, for the span of your mortgage term.
This makes FHA Loans to be different from conventional mortgages because they only require Private Mortgage Insurance (PMI) to be paid.
Conventional lenders allow you to pay less than 20% of the down payment plus the PMI. Note that it will be 1% of your loan amount and it will be removed once you settle the 20% equity.
Another downside of FHA loans is that they have limitations on the amount that you can borrow.
lthough the limits are increasing, it’s still lower than the limit for conventional loans.
Lastly, FHA loans have property standards that prevent you from buying the house that you want. But the good thing about it is that these minimum property standards protect buyers from purchasing disrepair houses.
Most people who opt for a short-term mortgage can get better rates than a long-term mortgage.
However, short-term loan interest rates are more likely to increase depending on the market activity.
Adjustable Rate Mortgage (ARM) lets you pay your mortgage as early as 7 years.
On the other hand, fixed rate mortgages allow you to pay the loan for 15–30 years. The good thing about it is that no matter how the interest rates increase, you are still paying for your mortgage’s fixed rate.
Now that you know the different facts about home loans, you must now be ready to shop around and finally get the house you deserve.
Don’t hesitate to ask your mortgage lender any questions if you find confusing information about the transaction.
You need to have clarity on how the home loan process works before you close the deal.
Talk to our team at Sprint Funding today to choose the best mortgage loan for you.