Conventional Home Loans

 


2018 High Cost CA Counties!

Conforming and FHA loan limits went up as Janurary 1, 2018 to $679,650.00 from $636,300.00 for High Cost Counties, also the floor as well as the ceiling has been raised by The Federal Housing Administration. The floor is $453,100.00 in non-high cost counties. See High Cost Counties Chart for the up dated max. loan amounts for the high cost counties. Click Here

 

 


 

 

 


 

 

 

This page explores general information regarding interest rates, discussion of mortgages, lending products, including the HARP Program/ For specific products check-out the menu at the top and bottom listing various mortgage and other products.

 

 

 Fast, Safe and Secure!


 

"We've worked with Jaren since 2003, and he has belped us and our family members get through the mortgage process many times.

He is very well versed in the mortgage process, and is very patient. He is by far the best broker we've have ever worked with, and always has his customers well being at the forefront of all that he does. To this day anytime, I have a mortgage question I ask Jaren.

I had him help my parents, and my children in financing their properties as well. Anytime any of my friends took to financing I send them to Jaren. Hands down I do not think there is a better mortgage broker than Jaren Dahlstrom."

Gregory and Elizabeth H., Lathrop, CA

 


 

Check out how to make Leverage work for you! At the bottom of this page!

 

 



 

What is a Qualified Mortgage?

"...A Qualified Mortgage is a category of loans that have a certain, more stable features that help make it more likely that you'll be able to afford your loan. ..."
CFPB, Consumer Financial Protection Bureau

 


Don't Miss Out - $2,000 in Income Tax Savings!

If you are in the moderate or low income category (determined by County FHA median income) there are programs you should check out a great one on Niche Products page is the Mortgage Tax Certificates issued by California Counties that save up to $2000.00 additional credit off your Federal Income Tax liability. This a tax credit, not a tax decduction. For details click here to go to: Loan Assistance page.


 

 

 


 

 

CA Conforming High Cost Limits by County! 

The Standard Conforming Loan Amount is $453,100. For Homes Above That Amount See The Conforming Loan High Cost Limit 2018 by CA County Chart Click Here!

 

 

 

 

 

 

 

 

 


Calif. Conforming High Cost Limits by County! 

The Standard Conforming Loan Amount is $453,100.00. For Homes Above That Amount See The Conforming Loan High Cost Limit 2018 CA County Chart. Click Here!

 



 

What clients think:

"My wife and I strongly endorse and recommend Jaren Dahlstrom, for your real estate needs. Five years ago, he helped us in acquiring our house, and two years latter assited us in lowering our mortgage payment. He is an expert, honest, trustworthy, and meticulous in securing purchase and refinance home mortgages and it will benefit anyone looking for home financing to use him."

Alberto and Eugenia L., San Pablo, CA

 


 


"Jaren has helped me with a home purchase loan and 2 refinances. I would certainly rely on him again should I need another home loan. He dedicated himself to finding the best loan for me, and went the extra mile to make it work. I know he will do the same for you!"

Christina H. Kelseyville, CA

 


 

 

 


 

 


 


 

 


 

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What Is A Conventional Home Loan?

There is confusion as to difference between conventional and conforming home loans. Conventional home mortgages are all loans that are not made or guaranteed by the U.S. Government, which are FHA, USDA or VA. Conventional loans included: Conforming Home Loans, which conforms to the standard loan guidelines set by Fannie Mae and Freddie Mac. Conventional loans also include everything from Qualified Mortgages to Subprime.

In case you are still confused? Conventional vs Conforming: As mentioned above Conventional Loans are not made or guaranteed by US Government. So if it is not a government backed loan, it is a Conventional Loan. However, conforming loans conform to the Fannie Mae and Freddie Mac Guildelines and these mortgages can be sold to one or the other of these GSEs. Government-Sponsored Enterprise's that invests in home mortgages. Which allows the originating lenders to recover their original investment, make a profit and to continue to make new mortgage loans. These Conventional and Conforming loans are not guaranteed by the US Government. To keep them straight it is easy: all mortgages are either Conventional or they are Government.

A "Qualified Mortgage" or "QM" loan is a category that meets specific borrower guideline requirements for new conforming loans. These new "QM" mortgages are being phase in and being established industry wide by Fannie Mae and Freddie Mac by January 2018. The primary rules governing a Qualified Mortgage is the "Ability to Pay", a limit on your debt-to-income ratio (43%), no excess upfront points and fees, no harmful loan features (like negative amortization, excessive loan terms, interest only loans or balloon payments) and it also provides certain legal protection for lenders otherwise known as "Safe Harbor" mortgages. Non-qualified loans are basically everything else.

Non-conforming Mortgages: Are those loans that do not fit either Fannie Mae or Freddie Mac Guidelines. These loans include Jumbo, Portfolio, Alt-A, Longer Term (more than 30 years) and Subprime loan products.

I have a program with one lender, where you get up-to $550.00 credit for your appraisal costs at the close of escrow on ALL conventional home loans!


Conforming Loans: The guidelines have restrictions on amount of the loans. There are two conforming loan amount limits mentioned in the guidelines. A conforming maximum loan amounts of the standard loan limit is $417,000 for a single unit property and for high-cost areas the limit increase up to $721,050. The high-cost CA counties limiting out at $625,500. The loan size limit is also governed by the number of units from 2 to 4 additional units have equivalent higher maximum loan limits. I have provided a chart showing the high-cost counties for the conforming CA home loans. These high-cost California Counties are generally the most populated. To look up the maximum amount for the county, where you want purchase, and select the number of units you are interested in purchasing, the result is maximum dollar amount to qualify for a Conforming Home Loan (Click Here To Go To Conforming Loan High Cost Limits for 2018 Chart). Additionally, there are other guidelines, which deal with loan-to-value, the borrower's credit history, FICO scores, and debt-to-income ratios, as well as, specific "overlay guidelines" set by the individual mortgage lenders. Contact your loan officer, or call me, and I will guide you through these requirements. If the home you wish to purchase, would require a loan more than the conforming high cost limits for the given your county, you will need to look at a Jumbo loan option. Jumbo loan information

Historically, the public often understood a Conventional Loan required a 20% down payment, but that is not the case. With today's higher property values, programs have been developed to help the home buyers qualify with lower down payments with very attractive interest rates. While benefiting the lender with this less risky mortgage investments and increasing the pool of home buyers, these lower down payment programs also benefits the borrower . Today, the down payment can be substantially less. A Conventional mortgage can be almost any amount to 95% loan-to-value depending on the lender. However, the Home Possible (Freddie Mac) and Home Ready (Fannie Mae) programs go down to 97% loan-to-value or just 3% down. I have a specific lender, who's program, provides an additional lender "equity boost" as a free grant of 2% to combine with the 93% programs leaving just 1% down payment required by the borrower. Yes, I did say a 1% down payment! Leaving the home buyer with 3% equity at closing. All combined with great low rates in this qualified home loan. You need to know this is an exclusive 1% down program, which is not available from other lenders I have it available for well qualified borrowers and you can contact me at phone number to left or click here to contact me directly to learn more. The current low rates make this a real mortgage bargain, plus it can close in just of 30 days or less. FHA typically can take 45 to even 60 days, and only goes down to 3.5% down payment and carry a higher mortgage insurance costs!

Second Loans - These loans traditionally are used to provide additional funds for a down payment or provide cash to make to add another bath or bedroom, or provide a down payment for a future real estate pruchase. Please note if you are purchasing a home the first loan is 80% LTV and for expamle 15% second and you put 5% down none of the loans would be subject to mortgage insurance. This can also be true for non and owner occupied properties. Credit requirements are much stricter for a second loan. With fewer lenders are willing to make these loans. See niche products for Silent Seconds, which don't have to be repaid and are often offer by cities or community non-profits.

Equity Lines of Credit - These are second deed of trust home loans that allow a home ower to take out cash from there home they are either a HELOC or HELOAN. A Heloan is a fixed loan amount and loan rate and Heloc is a variable or adjustable rate loan. which allows the loans to be made available as the need arises to loan limit. They can go to 80% loan-to-value of the currrent value of your home and can have flexible terms up to 15 years and can often be extended at the discression of the lender. The funds can be used for anything you want . Perhaps a new roof or to pay for college. Since it is a line of credit as the borrower pays down the loan they can reborrow those funds by using a credit card or bank checks.

Mortgage Insurance - When a Conventional Home Loan down payment drops below 20% a required Mortgage Insurance (PMI or MI) usually kicks in, and is paid monthly along with the mortgage payment. Mortgage Insurance is designed to cover the first 22% of the loan and is paid to the lender in case of a borrower default. Because, the borrower must pay MI, (Borrower Paid MI) in addition to the mortgage amount , which can effect a borrowers Debt-to-Income Ratio negatively (see Home Buyer section for more details). Some lenders offer "Lender Paid Mortgage Insurance", which comes with a slightly higher interest rate. However, often the Lender Paid MI can have a more positive (less negative) impact on the borrower's overall mortgage payment and DTI ratio and could be the difference in qualifying for the loan.

Down Payments: property, 1-to-4 units. The down payment requirement can vary from lender to lender, but expect a typical down payment of 25% to 35% of the purchase price. Investment property carry more risk and will carry a commensurate higher interest rate than an owner occupied property. Because a non owner property carries more risk , the lender want a larger financial commitment to the project. from the borrower. However, if you choose to live in one of the units you can qualify for a possibly a lower down and an owner occupied interest rate.

When buying a investment property, 1-to-4 units: The down payment requirement can vary from lender to lender, but expect a typical down payment of 25% to 35% of the purchase price. Investment property carry more risk and will carry a commensurate higher interest rate than an owner occupied property. Because a non owner property carries more risk , the lender want a larger financial comitment to the project. from the borrower. However, if you choose to live in one of the units you can qualify for a possibly a lower down and an owner occupied interest rate.

The Renovation Loan: Homestyle by Fannie Mae

The alternative to FHA 203k is the Fannie Mae Homestyle Renovation home loan. For a quick look-upRenovation Loan Chart Click Here. This conventional loan is for both home buyer and/or home owners that require funds to repair or remodel a property. Homestyle can be used a purchase or a refinance an existing property. The property can be an owner occupied single unit or an investment property 1 to 4 units, which can be a primary residence, a vacation home (second home) or an investment rental unit, whether a house, condo or townhouse property. Where a FHA 203k is limited only to owner occupied properties. The repairs must be completed by a license contractor and costs based on specific plans for the rehab work.. The future appraisal must be based on those contractor provided plans. The contingency requirements for unforeseen costs can come from the borrower or financed into the loan, and any unused construction funds must be returned to the lender to reduce the outstanding loan balance. However, if those funds were from the borrower, the actual costs of supplies or additional repairs for which paid receipts are provided, then they will be returned. For example funds left over from a kitchen rehab, the borrower could use their surplus funds to buy new appliances. Which was not in the original budget and wishes to use those funds. Also, assuming the borrower could not live in the property for up to 6 months additional funds can be budgeted into the mortgage to cover mortgage payments, property tax escrows, insurance escrow and private mortgage insurance. This aspect of Homestyle can be very helpful when you consider you will also be paying rent or the mortgage on your old home,as well as your new mortgage costs.

There is no requirement or restriction for the type of repairs or minimum cost level, as long as it is a permanent part of the home. and the maximum is subject to no more than 50% of the improved future appraised value. Even pool and spa renovations are permitted. If you would like more information concerning the Homestyle or any loan program please give me a call, whether you are buying or refinancing and want to make improvements to the home. You can reach me at 510.215.1743 or simply go to contact page. Just let me a know convenient time to call you and you want to learn more about Homestyle home loans. You can also visit : www.fanniemae,com/singlefamily/loan-limits.

For a quick look-up Renovation Loan Chart Click Here.


How to Refinance a Property in a Living Trust:

If you own a property that is held in a "Living Trust", which is a legal document used to protect a home from probate, as well as other personal property. With a living trust, a trustee, which could be you the homeowner, who makes decisions concerning the trust has the legal responsibility for the trust. I would suggest, it is always wise to get legal advice for guideance prior to making major decisons regarding the trust. If you or the trustee still wishes to refinance the property, he or she will follow the guidelines set by the mortgage company, however, some lenders do not extend loans to trust properties. You can ask your loan broker. If your lender does not then you will need to take the property out of the trust for purpose of getting the loan. You can have your attroney or your escrow/title company to do this for you. Since you will need two deeds one to take it out of trust and a second to put in again immediately after the refinance is completed. A warrenty, by the trustee, will need to drawn stating that the property can be used as collateral on the new mortgage. If you are looking to refinance a property held in trust contact, Jaren, Your CA Mortgage Advisor to review the trust documents. he will help you with what needs to done and walk you through the entire process.

 

 


Tip! Paying points will allow you buy down the rate. One can always ask the seller to pay the points as part of your purchas contract. "Points" are a cost paid for a lower interest rate, than the borrower would normally qualify, and results lowering your monthly payment. Allowing the borrower to save thousands of dollars in interest payments over the life of the loan. This is available to owner and non-owner occupied home buyers. Buying down your rate or paying points is also available for a refinance. When buying down points, when the borrower uses their your own funds, one wants to weight the length of time it will take to recapture the cost vs. the savings calculated over months or years to re-coup the point's cost in interest savings. Savings should, also be weighed against the estimated time the borrower intends to hold the mortgage before selling property or refinancing the loan. Then make a judgment if the additional cost actually makes sense for a lower rate. It usually only makes dollars and cents if borrower is going to hold for more than 3 years. But do the math! To make sure it is to your benefit in your specific case.


CLick on the 1% Down Ad Below, It's a Link To Lean More About This Exciting Program!

 

 


Our Down Payment Protection Plus Program !

Is the only next generation mortgage protection program that protects up to the full amount of the home buyers or refinance transactions for the full amount of your down payment in a down market. With our lender's Down Payment Plus Program, you can protect your hard-earned assets, now and in the future. Anyone can offer a lower rate. Any loan officer can offer you a low rate, but CA Mortgage Advisor can offer peace of mind and a low rate.

Our lender's Down Payment Protection Plus Program is available on the following products:

Conventional: 30-year fixed rate (including High Balance)

Fannie Mae Home Ready and Freddie Mac Home Possible - (30 year fixed rate, including High Balance)

FHA: (30 year fixed rate, including High Balance)

VA: (30 year fixed rate, including High Balance)

Prime Jumbo: (30 year fixed rate, including High Balance)

FlexKey Expanded and Restart: (Non-Agency Expanded Prime)

Highlights

> No upfront cash required

> Must be used for primary residence

> Covers the first 7 years of home's value

> 24-month waiting period

> Covers down payment up to 20% of the home's value (max. of $200K)

> FHFAm data used to determine market valuation

> Sale must be unrelated third party and leasebacks are not permited

Get Qualified Today, Fast, Safe and Secure!


Tip! Paying points will allow you buy down the rate. One can always ask the seller to pay the points as part of your purchas contract. "Points" are a cost for a lower interest rate, than the borrower would normally qualify, and results lowering your monthly payment. Allowing the borrower to save thousands of dollars in interest payments over the life of the loan. This is available to owner and non-owner occupied home buyers. Buying down your rate or paying points is also available for a refinance. When buying down points, when the borrower uses their your own funds, one wants to weight the length of time it will take to recapture the cost vs. the savings calculated over months or years to re-coup the point's cost in interest savings. Savings should, also be weighed against the estimated time the borrower intends to hold the mortgage before selling property or refinancing the loan. Then make a judgment if the additional cost actually makes sense for a lower rate. It usually only makes dollars and cents if borrower is going to hold for more than 3 years. But do the math! To make sure it is to your benefit in your specific case.


CLick on the 1% Down Ad Below, It's a Link To Lean More About This Exciting Program!

 

The interest rate is 4.294% APR, 30 year term, fixed rate and subbject to change without notice,

 
Use our convenient online BLINK application form for a quick approval, or if you have questions or want more information about this great program call 510.215.1743. Jaren he will walk you throught the process. To e-mail, Click Here or call and Jaren will contact you ASAP! Apply online in a blink, it is fast, easy, safe and password protected! If you need help any time in the application process Jaren can help you by sharing screens with you. Just call, he is here to help!


  How does leverage work for you when you are buying a home?

Leverage works for the home buyer in a growing real estate market by magnaifing the return on investment on a percentage basis. Using a 7 year arbituary period to measure returns on actual investment, it could be 10, or 20 years. Basically the borrower/investor is putting up a small portion of the property's value to control or own and benefit from it's eventual growth.The larger the leverage the bigger the return on the investment. Here is an example: Let's assume we have two buyers who bought identical homes with identical values and the homes went up exactly the same in market value. We will call the two buyers, Bill and Sally. Bill put 20% down on his $300,000 home, or $60,000. Where as Sallly put only 3% or just $9,000 down and both homes closed with the same closing costs. The payment difference was about $247.32 a month higher for Sally, because of her smaller down payment. If the homes went up at the historic rate of 4% average per year for 7 years the value of the homes would have grown by $141,100 approximatly. Bill paid about $20,816 less in payments which was mostly interest and has a tax advantage, which we did factor in. Both homes grew by 68.80%, however Sally returned was15.667 times on her investment, and Bill just got a 2.35 times return on his investment. Sally paid a higher payment than Bill, but after that is substracted from the total return how did she do? She had an adjusted return of 12.681 times her investment. If Sally would have taken advantage of CA Mortgage Advisor's HOME ADVANTAGE loan program with1% down, with the 2% equity boost she would have gotten and additional $6,000 in equity to add her total return as a gift, from the lender. That would have made Sally's adjusted return on actual investment was 6 to 7 times better than Bill's. That is why the more leverage makes a lot of dollars and sence! (For our example we used the interest rate of 4.125%, 4.294 APR for each borrower, the loans were both 30 year term, with a fixed interest rate. Please understand and know all interest rates can and will change until they are locked, and they do change daily, so expect your interest would be different. This comparison is for educational purpose only. The only difference in the loans are the loan amounts, because of the difference in the down payments made by each borrower.)

The only advantage a larger down payment has is when your in a declining market. If the homes went down say 10%. Sally would be underwater on her loan and Bill would not. As long as Sally & Bill can continue to make a payments and just waited out recovery and even major set back is not a problem for either borrower. But if they both could not keep the up payments Sally lost would be $9000 and Bill's would $60,000. So, looking at our example the down side risk is less with the greater leverage, and the return much larger. Given both investors are financially sound borrowers being more highly leverage is an advantage. This is particularly true with real estate as an investment. Because under California real estate law the creditor can only take the property in foreclosure. They can't sue for any losses the mortgage lender suffered in loan transaction even if the value of property dropped to "0'". So the lesson here is even if you have all cash to pay for the property, and you are on a sound financial footing, it is better to leverage the purchase as high as possilble. Take the rest of the money that could been used for the purchase, and put it into other investments and see all them all grow. A wise man said "use other people's money to make more for yourself". The above example is presented for educational purposes ONLY and is not an offer to lend or a solication to borrow. Nor should this example be taken as a gurantee of any kind. Rates change daily and programs are subject to change without notice.

Click here to learn more about out Home Advantage Home Loan with 1% down and 2% (up to $5,000) free lender paid equity boost at the close of escrow!



 

 

 

 

 

 

Copyright 2016 Jaren Dahlstrom, All Rights Reserved -- Jaren Dahlstrom, Loan Officer, CA BRE 01358563, NMLS 237999 -- United Lendinging Partners/United Realty Partners BRE #02012818, NMLS #1525816