6 People Who Help You Buy Your First Home

Besides you and the home seller, about six other people will be involved when you buy a home. Some of them will be involved from beginning to end, others will pop in and out, and still others will be optional.

The article is written by John Wake for Forbes Online. You can read the full article here.

======================================================

Sheila Abai is a senior mortgage consultant at PNC Bank. She utilizes her 20+ years of finance and mortgage experience to identify the best mortgage and refinancing solutions for her clients.  Sheila can be contacted via email at Sheila.Abai@PNC.com or via telephone at 310-666-5959.

Why High Home Prices And Rising Mortgage Rates Aren’t Stopping Sales

Mortgage rates hit their highest point in seven years last month, and home prices have jumped 6.5% since mid-2017. On the West Coast, many cities are seeing double-digit gains in home appreciation. But somehow, home buying isn’t slowing down.

The article is written by Aly J. Yale for Forbes Online. You can read the full article here.

======================================================

Sheila Abai is a senior mortgage consultant at PNC Bank. She utilizes her 20+ years of finance and mortgage experience to identify the best mortgage and refinancing solutions for her clients.  Sheila can be contacted via email at Sheila.Abai@PNC.com or via telephone at 310-666-5959.

How Can I Prepare to Buy My First House?

Purchasing a home may well be the most significant financial decision of your life—so how do you ensure that decision is a prudent one? There are a few steps that first-time homebuyers can take to prepare for it.

Get Your Credit in Line

First, improve your creditworthiness. If your credit score is down in the 600-range (or lower), you’ll have a harder time finding a loan, and will likely have higher interest rates and larger down payment requirements. A score that exceeds 700 will get you a better overall mortgage loan.

So how can you ensure strong, healthy credit? Pay down any existing debts you have. Make sure you’re making your bill payments on time. And stop applying for any new lines of credit (including credit cards) until you close on the home.

Determine How Much House You Can Afford

Don’t fall in love with any listings until you have some sense of what you can afford. To do this, sit down and look at your monthly budget. As a general rule of thumb, a home loan payment shouldn’t be more than 28-35 percent of your total monthly income.

Keep in mind that you’ll also have some additional homeownership experiences to factor in—including insurance, utilities, and home maintenance costs.

Start Saving Some Money

In order to buy a home, you’ll need to have a little money in the bank. You’ll need money for a few things—most notably the down payment. Most loans will require a down payment of roughly 20 percent the total home purchase price, though you can find loans with much lower down payment requirements, too. Also make sure you save a little extra for closing costs, which could be anywhere from three to six percent of the total home purchase price. (The seller may end up paying some or all of the closing costs, but you can’t bank on that.)

It is also wise to have a small emergency fund—even if it’s just $1,000 or so—to help defray any unexpected home repair costs that arise. This isn’t necessary, but it is smart.

Get Pre-Approved for a Mortgage

Compare mortgage interest rates and find a lender you feel comfortable with—and when you do, ask about getting pre-approved for a loan. This is an important step because it will make your mortgage loan application go much smoother and faster. What’s more, some sellers will actually require pre-approval in order for your offer to be considered. Your lender will walk you through the process and explain to you what makes it so important.

If you’re ready to talk about pre-approval, or simply have questions about current mortgage interest rates, we’d love to talk with you. Reach out to us today to learn more about getting pre-approved for a mortgage loan in Los Angeles or the surrounding area.

First Time Homebuyer’s Checklist

Homeownership remains a hallmark of the American dream. When you reach the point where you are ready and able to purchase your first home, that’s cause for excitement and for pride! At the same time, it can also be a little daunting: It’s a big step, both in terms of personal lifestyle as well as finance.

Moreover, the home buying process itself can sometimes seem a little circuitous. With the right preparations, though, even first-timers can ensure a smooth and streamlined home-buying journey, from the mortgage application up through closing day. Here is a checklist to point you in that direction.

A Checklist for New Homebuyers

Get your credit together. Before pursuing a home loan, make sure your credit score is right where you want it to be. If you have a lot of outstanding debts, try to pay them down as much as possible. And, ensure that you are up to date with any bill payments, which can impact your credit score.
Ensure you have some money in the bank. Even with a great mortgage, you may still wish to make a down payment—typically 20 percent of the total home value, though this isn’t set in stone. Get a little nest egg in order before you start the mortgage application.
Look at your budget. Along with your partner or spouse, take a good, long look at your household budget and figure out roughly how much you can afford to spend on a house each month. Keep in mind that, in addition to your mortgage, you’ll also have insurance, utilities, and property taxes.
• Avoid new credit. As you take out a new mortgage loan, one of the worst things you can do is to open other lines of credit—such as new credit cards. Try to avoid any unnecessary activity on your credit report.
• Gather paperwork. The home loans process requires you to submit plenty of documentation; get that documentation together now to make the process go smoother. Some pertinent documents to gather include pay stubs from the past couple of months as well as your income tax filings from the past year or two.
• Consider your mortgage term. Weigh the pros and cons of 15-year and 30-year mortgage loans and decide which one makes the most sense for you and your family. Reach out to us directly with any questions!
• Find a good agent. It’s vital to have a real estate agent who knows the area well, and with whom you feel comfortable. Don’t hesitate to interview a few different agents if you don’t hit it off with the first one you meet.

Get Help on Your Homebuyer’s Journey

As you embark on the home buying journey, you’ll want to have some expert guidance to keep you on the straight and narrow. An agent can provide that, and so can a qualified mortgage loan professional. To learn more about home loans and mortgage rates in Los Angeles and the surrounding area, reach out to our seasoned mortgage team directly.

What are the Steps for First-Time Homebuyers Seeking a Mortgage?

Purchasing a home is one of the most significant financial undertakings you’ll ever make. For first-timers, it’s important to ensure that you’re making wise decisions, all while keeping the process as smooth and as streamlined as possible.

But what steps does this process entail, exactly? Here’s a brief rundown, including some of the key actions first-time homebuyers should take as they try to get their home loan lined up.

Start by Reviewing Your Financial Health

It’s easy to start casually looking at local real estate listings, and before you know it fall head-over-heels in love with a house—but wait! Before that happens, make sure you’re actually in a good place, financially, to take out a mortgage loan.

  • Remember that, with most home loans, you’ll need to make a down payment—usually around 20 percent of the home’s total value. Do you have a nest egg tucked away?
  • It’s also wise to have a small emergency fund on hand, just in case you have a home maintenance emergency—for example, an HVAC unit that goes out. Even $1,000 in the bank can help defray these unexpected costs.
  • Finally, look at your monthly budget, and see how much wiggle-room you have for monthly mortgage payments. A good rule of thumb: Your mortgage payment shouldn’t exceed 35 percent of your monthly income.

Clean Up Your Credit History

The terms of your mortgage loan will largely be determined by your credit history—so before meeting with lenders, it may be advantageous to clean up that credit history.

– If you have a lot of outstanding debts, try to pay them down as much as can. Pay off smaller debts completely, then tackle the larger ones.
– Make sure your bills are all paid on time, as late payments can ding your credit history. It may be beneficial to set up automated payments whenever possible.

Meet with Lenders

It’s always wise to shop around for a mortgage. Contact two or three different lenders and ask them about current interest rates. They may wish to talk with you about your financial history, and that’s fine, but make sure they don’t obtain your credit score until you’re ready to move forward. Too many checks on your credit score can actually cause it to decline.

Find a lender who offers competitive interest rates, but also someone who is knowledgeable and helpful, and with whom you feel comfortable. Don’t be afraid to trust your gut on this one!

Once you find that lender, ask about the process of getting pre-approved for a mortgage. That way, once you do find the home you want to purchase, the process of obtaining your home loan will be much smoother and quicker.

With these steps, you’ll be ready to make prudent financial decisions, and to be smart about your home purchase. To learn more about the best policies for first-time mortgage seekers, don’t hesitate to contact our Los Angeles home loan team today!

What is the Best Way to Get a Home Loan?

The decision to buy a home is truly a momentous one—but it can also be a little overwhelming. For new buyers, in particular, applying for a home loan can seem big and frightening. Actually, while the process involves a lot of moving parts, it’s not as scary as you may think it is—especially not if you work with a qualified mortgage loan provider who can guide you through the journey.

It also helps to have a lay of the land, and to know basically what the process entails. Here is a brief rundown—some steps you should take as you seek a mortgage loan.

How to Pursue a Home Loan

Find Out Your Credit Score

A good starting point is to get a sense of your financial health—and that means reaching out to a credit reporting bureau and requesting your credit report. Hopefully, you’ll have a credit score in the 700-720 range or higher. If it’s lower, your home mortgage interest rates may not be as good, but don’t panic. Instead, look through your report for any errors (errors are quite common) and report any that you find. This can help raise your score.

Save Some Money

You’ll also want to make sure you’re saving some money—for a down payment and for closing costs. (A down payment will typically be about 20 percent of the total home purchase price; closing costs could be anywhere from two to eight percent.) If you’re going to hire a moving company to help with your transition, save a little bit for those expenses, too.

Avoid Big Changes

What do we mean by big changes? Changing your job, opening any new loans or credit cards, or making any huge purchases (like a new car or a lavish vacation). As you prepare for the mortgage application process, it’s important to keep everything as even-keel as possible.

Be Responsible in Your Finances

If you have some existing debts, whether from student loans or simply from credit cards, make sure you’re making consistent payments. And, double and triple check to make sure you’re paying your bills on time. Any lapses here could lead to hiccups in your loan application process.

Meet with a Lender

Ultimately, you’ll want to speak with a qualified lender who can talk candidly with you about home loan interest rates and address any questions you may have about the mortgage process. Once you find a lender you’re comfortable with, start the pre-approval process, which will make it easier for you to get approved for a loan later on. (And, it signals to sellers that you’re a good, trustworthy buyer, as well.)

Are you ready to talk to a lender? If you’re seeking a home loan in Los Angeles, give us a call. We’d love to guide you through this process, and to make everything as clear and as simple as possible. Reach out to us today to schedule a time to talk.

How Does a VA Home Loan Work?

For those who’ve served in the United States military, VA loans provide one of the best, most powerful ways of pursuing homeownership. Unlike more traditional loans, VA loans generally don’t require any kind of a cash down payment; they offer low interest rates, and the loan terms are quite flexible. It’s no wonder that VA loans have remained so popular since their 1944 inception.

Before pursuing a VA loan, however, it’s important to know some of the specifics. In this post, we’ll offer a few quick facts about VA loans—what they are, how they work, and how you can benefit from them.

How VA Loans Work

  • Just like with conventional loans, it’s important to get prequalified and pre-approved. When you meet with a VA lender, you can ask about getting prequalified, which will give you some sense of how much home you can afford and what kind of loan terms you can expect. Also ask about getting pre-approved, which will make the actual loan application process much quicker and smoother.
  • VA loans are reusable. Veterans are permitted to use their full VA loan entitlement over and over again—just so long as they pay off the loan each time.
  • You can’t use a VA loan for just any type of home. First and foremost, these loans are approved for primary residences only—meaning you can’t use a VA loan to get a vacation home or a rental property. Also, the VA loan requirements specify homes that are more or less move-in ready. If you try to use a VA loan for a “fixer upper,” the lender may very well turn you away.
  • You can get a VA loan even if you have a suboptimal credit history. In fact, veterans who’ve struggled with bankruptcies, bad credit, or foreclosures in the past can still qualify for great rates on a VA loan! You don’t have to let your history hold you back from your dream of homeownership.
  • You don’t have to worry about mortgage insurance. Normally, if you don’t make a 20 percent down payment, your mortgage lender will require you to purchase private mortgage insurance—which can be pricy. But with a VA loan, you don’t have to worry about that; the VA itself guaranties your loan, at no expense to you.
  • You may have to pay a fee. While VA loans don’t have insurance requirements, they do come with a service fee—though you can roll this into the loan amount if you’re unable to pay it upfront. And, if you have a disability connected to your military service, you can often have this fee waived altogether.

If you’re ready to learn about getting prequalified and pre-approved for a VA loan here in Los Angeles, we invite you to contact our lenders today. We’d love to answer your questions or to walk you through the application process. Contact our Los Angeles home mortgage team right now!

Who is Eligible to Receive a VA Loan?

A VA loan makes it easier for United States military personnel to invest in homeownership. VA loans come with competitive interest rates and flexible terms. Generally, they don’t require a down payment, and they also don’t require the borrower to have private mortgage insurance. There are plenty of other benefits, too, such as the ability to get a VA loan without having an especially high credit score.

In other words, VA loans are incredibly helpful—but who qualifies for them, exactly? In this post, we’ll look at some of the eligibility restrictions that are placed on VA loans, and help you determine whether this is a mortgage you should look into.

Who is Qualified for a VA Home Loan?

Some quick points about VA loan eligibility:

  • Most members of the military, most reservists, most National Guard members, and most veterans are eligible to apply for a VA loan.
  • Husbands and wives of military members who died in active duty, or who died as the result of a service-related impairment, can also apply for a VA mortgage.
  • In terms of active-duty military personnel, you can usually qualify for a VA loan after about half a year of service.
  • Members of the Guard, meanwhile, generally need to wait six years or so to apply—unless they are called into active duty, in which case that timetable can be accelerated considerably.
  • During a time of war, any Guard member, reservist, or active-duty military member becomes eligible for a VA loan after 90 days of service.

In order to get a VA loan, it’s necessary to have a Certificate of Eligibility, which is issued by the military. With that said, you don’t actually have to have this document in your hands to start the application process. Many VA lenders can help you obtain this certificate, as part of the normal mortgage pre-approval process.

Which Homes Qualify for a VA Loan?

One additional point to make is that not all types of real estate can be purchased with a VA home loan. For one thing, it has to be a primary residence. You can’t use your VA loan to purchase a vacation home or a rental property.

Also, most VA lenders will only approve the loan for homes that are more or less move-in ready. So, you can’t use a VA loan to purchase a “fixer upper.”

Likewise, properties that are a little more unorthodox—such as large farms—will likely be denied by a VA lender.

Get Help Qualifying for a VA Loan

If you believe that you meet the eligibility standards for a VA loan, and want to know more about how the loan works—or even if you just want to ask about current home loan interest rates—reach out to our Los Angeles office today. We love working with those who have served our nation and look forward to guiding you through the home loan process.

What are the 2018 VA Loan Limits?

For those with a military background, a VA loan can provide one of the most flexible and cost-effective routes to homeownership. Not everyone is eligible, of course; these home mortgage loans are for those who’ve put in their time in the military, the National Guard, or the Reserve. Military spouses often qualify, as well. And of course, there are some restrictions—both on how much you can borrow and what kind of homes you can buy.

In this post, we’ll take a look at some of those limitations in greater deal, and help you get a feel for what is and isn’t possible with a VA loan.

What’s the Limit on a VA Loan in Los Angeles?

First and foremost, whether you’re looking into an FHA loan, a conforming loan, or a VA loan, there are always going to be limits on how much you can borrow. That borrowing limit depends on a number of factors—including geography.

So what about those who are seeking a VA loan in Los Angeles or the greater Orange County area? The general limit on a VA loan is $679,650—but again, there are a lot of factors in play. For a specific number, make sure you speak with a local home loan professional.

Are There Any Other Limitations on a VA Loan?

In addition to the loan limit, there are some other restrictions on how you can use a VA loan. Again, only those with certain military connections can qualify. What’s more, you can only use VA loans to obtain certain kinds of home.

It has to be a primary residence, for starters—so, you can’t use a VA loan to purchase a vacation property or a rental. And, it has to be a move-in-ready home. Most lenders will not approve you for a VA loan on a “fixer upper,” and there are stringent inspection and appraisal standards your property must meet.

What are the Benefits of a VA Loan?

These limitations are important to note, but so, too, are the potential benefits of a VA loan. Some of the primary ones include:

  • You can get a VA loan even if your credit history is iffy.
  • You can get a VA loan without having to make a down payment.
  • You also don’t have to secure private mortgage insurance, though you may have to pay a one-time loan fee.
  • You can enjoy competitive home loan interest rates and flexible terms.

The bottom line is that, within certain limits, there’s really a lot you can do with a VA loan. If you believe you are qualified for one and are interested in securing a loan right here in Los Angeles, we invite you to contact the PNC team at your first convenience.

Are There Any Programs to Help Veterans Buy a Home for the First Time?

For U.S. military veterans, adjustment to civilian life can be challenging. One of the biggest challenges is finding a place to live and to lay down some roots. Homeownership can seem like a distant dream, yet there are a few programs that can make it more attainable.

These programs are available exclusively to those who have served our country—whether in active duty, in the Guard, or in the Reserves. In this post, we’ll highlight a few home-buying programs every veteran should know about.

VA Loans

The most obvious one is the VA loan—a home mortgage that’s only available to those who’ve been in the military, and also to some military spouses. VA loans exist to make homeownership more attainable to vets, and they come with a host of benefits:

  • You can qualify for a VA loan even if you have a bad credit history, including foreclosures and bankruptcies on your record.
  • You can get a loan without having to make a down payment, and there’s no need to secure mortgage insurance.
  • VA loans will generally come with low interest rates and flexible terms.

If you’re a veteran and you’re looking for home-buying experience, this is absolutely the best place to start.

Housing Grants

Additionally, the government offers a numbers of housing grants, which can help veterans to afford their down payments and to contend with the other costs of homeownership. You can contact the VA directly to learn more, but note that many of these grants are specifically for vets who have service-connected disabilities.

So, if you have any kind of ongoing injury or impairment due to your military service, be aware that there may be some housing benefits you can qualify for.

Military Housing Assistance Fund

A final program to be aware of is the Military Housing Assistance Fund, a non-profit that’s dedicated to helping service vets find affordable housing. In particular, the MHAF helps cover the closing costs of a new home, which can sometimes be a sizable amount—anywhere from two to eight percent of the total home sale price. You can ask your mortgage lender about eligibility for this program.

Every Vet Deserves a Chance at Homeownership

No matter your financial history or your credit score, there are ways for any military veteran to afford homeownership. The programs we’ve listed here are just the start; to find out more about some of the options available to you, or simply to ask us about current home interest rates for VA loans, reach out to our Los Angeles-based mortgage team today! We are always honored to speak with vets about their homeownership dreams.