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Pre-Approval NOT Pre-qualification

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Once you begin thinking about buying a house the most important thing to is do is find out two things:
1. How much a Bank will lend you.
2. How much your payments will be (including taxes and insurance)

There is little point in going out looking at open houses etc if you don’t know whether you can afford them. Save yourself a lot of time and frustration by getting Pre Approved. This is NOT the same thing as Pre-Qualified.

Pre-approved means you have a written commitment from a chosen Lender stating that your personal financial data has been checked out and your loan is ready to go as soon as you have a contract on a suitable home. Now is the time to get out for some serious house hunting knowing exactly what you can afford.

Pre-qualification is next to useless. This simply means you have given some general information to a Lender who can “honestly” say that providing what you say is true you will be able to get a loan. Until your income, credit, down payment, etc has all been proven you are not really ready to start looking.

 

 

 

100% Loans For 1st Time Buyers

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100% financing is a reality for 1st Time Buyers just about anywhere in Santa Clara and San Mateo Counties.

A multiplicity of State, County, and City programs are available and in many cases can be used simultaneously to make housing much more affordable than you would ever know. Even the I.R.S. has got into the game.

Some of these programs provide for an 80% first mortgage, while others provide a wide range of down payment assistance for the remaining 20%. These cover a wide range of strategies from equity sharing to straight cash grants. Often more than one of these will be used to provide the 100% needed.

It is important to use a mortgage broker familiar with all of these programs as the process needs to be co-ordinated with several different agencies.

Rather than try to summarize them all here are links to as many web sites as I am aware of, so do a little homework and contact me with specific questions:

STATE PROGRAMS

0 CALHFA. CALifornia Housing Finance Agency. http://www.calhfa.ca.gov/ This State Agency is the most common provider of the 80% base loan as they partner with most of the City and County programs.

CITY PROGRAMS

0 SAN JOSE. http://www.sjhousing.org/program/homebuyer.html has info on great programs for school district teachers, plus faculty and staff of San Jose State University, and down payment assistance on 16 new construction developments. http://www.sjhousing.org/program/HBList.html.

0 Santa Clara City. http://santaclaraca.gov/plan_inspection/first_time_buyer.html for info specifically for first time buyers. Also http://santaclaraca.gov/pdf/collateral/Santa-Clara-Model.pdf for a presentation about the Citys BMP (Below Market Price program). You will find the description beginning on page 10 of the presentation slides.

FEDERAL PROGRAMS

0 FHA http://www.fha.com/. A huge web site dealing with the best loans available today for buyers who do not meet the specific requirements for the first time programs. 3% down and flexible qualifying make this the first choice. For a snapshot see http://mccordrealtyservices.com/2008/06/08/fha-the-new-mortgage-of-choice/

0 MCC (Mortgage Credit Certificates). http://www.sccgov.org/SCC/docs/Affordable%20Housing%20Office%20of%20(DEP)/attachments/MCC_Brochure_2008.pdf. This is a dollar for dollar reduction of Federal Income Tax in an amount equal to 15% of the total mortgage interest paid each year.