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Temecula is vibrant, young city that offers an affordable housing alternatives to Orange County or San Diego County. The real estate market has townhomes, single-family homes, and condos. These options are much cheaper than homes in nearby counties.
Just as important as location and price, the right home loan is paramount in the home purchasing process. Having a skilled MLO by your side from the start will help you confidently submit your strongest offers. As an MLO it is my job to secure the best interest rate and closing costs for my clients. Rest assured, even thought this sounds daunting it is rather simple procedure that I will walk you through step-by-step.
Many different types of First Time Homebuyer Loans exist. A First Time Home Buyer is someone who hasn’t owned a property or been on its title in the last three years.
– **Types of First-Time Homebuyer Loans Available:**
– FHA Loans- Most flexible underwriting guidelines. With subordinate lien can go to 100% loan to value
– VA Loans- Eligible veterans are allowed up to finance 100% of the purchase price.
– USDA Loans- These loans are neighborhood specific but can finance up to 103% of the purchase price. I can check eligible properties for you.
– Conventional Loans- These loans can be coupled with a subordinate lien to reach 100% Financing.
– Credit score requirements- Generally the FICO score requirement is 620. For VA and FHA you can go to 580 with compensating factors.
– Income limits.- Income limits vary by program. For example, USDA varies on family size while VA or FHA do not have income limits.
– Debt-to-income ratio. The debt-to-income ratio refers to how much of your gross pay goes towards paying the mortgage and all other bills. Your debt-to-income ratio cannot exceed 50% of your gross pay
· Understand your financial situation
– Know your credit score. Apps like Credit Karma can help you access your credit score. Keep in mind these scores can read a bit higher than your actual FICO when applying for a mortgage. Decide how much you can pay each month, and we will adjust the budget to fit that amount.
· Research and Compare Loan Options
· This step is critical. An experienced MLO will help you shop around for interest rate and closing costs options. Many different loan programs have pros and cons so it is important to compare and contrast each loan choice.
Length of loan and down payment options are widely available. The right MLO will help you through these steps, providing information so you can make a smart and informed decision.
· Get Pre-Approved
Getting Pre-Approved is an important milestone in your home loan search. Give your MLO the financial documents they need to analyze your income and debts. This will help them determine the best purchase price and payment plan for you.
A Pre-Approval letter is then provide to your Real Estate Agent. This letter will outline the down payment, loan program and purchase price for your Realtor to submit along with your home purchase offer.
A pre-approval makes your offer stronger. It shows the seller that you have begun the loan process. It also indicates that you have a good income and assets.
· Find Your Dream Home
I specialize in First Time Homebuyer Loans. I can assist you in finding a Realtor. I can also recommend one from my network of experienced Real Estate Agents. For example, the right agent can help negotiate closing costs credits or extended escrow timeframes.
· Finalize Your Loan
-Once you are under contract the “heavy lifting” of the loan process begins. You will likely be asked to supply updated income and asset documentation. Underwriting will review all supplied paperwork and issue a loan approval for the loan.
Once all loan approval conditions are met, you will receive Final Loan Approval. Then, loan documents will be prepared for you to sign with Escrow. Once you sign the loan docs with Escrow, the County records the Deed, and you are now a new homeowner!
– Mistake 1: Not Shopping Around for the Best Loan. This is likely the largest financial decision you will make-have your MLO work for you an present 3 different options.
– Mistake 2: Overlooking Additional Costs. This includes monthly expenses such as property taxes, insurance, Mortgage Insurance or HOA dues. These can add hundreds of dollars to your payment. Better to be prepared that have unexpected expenses pop up that you should have be prepared for.
– Mistake 3: Ignoring Pre-Approval: I have said it before, but it is worth repeating- this step is critical. Home shopping without a Pre-Approval is just setting you up for heartbreak.
You may not be able to buy the house you love. The sellers might not trust that your loan will close on time. Because of this, they are not taking your offers seriously.
– Mistake 4: Underestimating Your Financial Readiness. Knowing where you stand with financial ability and credit worthiness is critical to your home buying process.
Every borrower is different. Some people can purchase immediately. Others may need time to improve their credit or save money for a down payment and closing costs before buying a home.
– As a practicing MLO, it is my responsibility to research all available loan and grant programs for First Time Homebuyers. I have extensive knowledge of first-time home buyer loan programs in the San Diego area.
PRW Lending Inc is the local expert throughout the state of California. With over 25 years in the industry, I am well versed on all things mortgage related as well as First Time Home Buyer programs. I can walk you through the entire process, step-by-step, so you feel confident in the closing of your new home.
The steps to home ownership are simple and logical to follow. Assessing your financial situation and requesting a Pre-Approval are the first steps along the homeownership path. From Loan Approval through close I can guide you the process—leaving no question unanswered. Please reach out today to schedule a quick financial analysis and let PRW show you the way home.
Get in touch today!