Mortgage options in CA and TX?

Question

I am debating buying in the So Cal market (where I currently rent) or move and buy in San Antonio, TX area. I want to get pre-approved for a loan so I know what my options are. Will I need different lenders for each area? Will each market have different kinds of loans available? If I do FHA first time buyer loan would it be the same in each market? We're leaning on San Antonio, mostly because we think we can't afford what/or where we want in CA? Opinions welcome.

Answer 1

I've lived in both So CA and SA. I'd pick SA long before I'd ever consider returning to Cali again!

National lenders cover both markets. There are some differences in mortgage products but mostly they protect the borrower, not the lender! For example, negative amortization loans are illegal in TX. Also, your homestead is protected from claims in TX as long as you pay your mortgage and taxes. Interest rates should be fairly similar.

Most lenders will only pre-qualify you. Final approval depends upon the property in question. If you keep your search within the pre-qualification guidelines there shouldn't be much trouble.

Soil conditions are a problem in most of South Texas. If the site isn't properly prepared before the slab is poured there will be problems, often many years later. Real estate agents are aware of the problems and can help you avoid most problems. Homeowner's insurance will NOT cover this so shop with care and get an independant inspection. (Been threre, done that, it's not fun!)

Real estate prices and cost of living in SA are far lower than So CA. The job market is OK for the most part. Schools are all over the radar screen from not too good to excellent. Check with your real estate agent for an update on what's good and what's not.

Yeah, there are no beaches there, but it's only about 2.5 hrs to Corpus Christi or S Padre Island. You won't find any surfing unless there's a storm in the Gulf.

There's plenty to do, lots of culture, and reasonable weather. Winters are a bit cooler than So CA but it rarely goes below freezing. Summers are on a par with the desert areas in So CA; the temps are lower but the humidity makes up for that.

Most folks in SA will gripe about the traffic, but if you're from So CA, it will be a refreshing change for the better.

Crime is an issue in SA but the worst areas are not nearly as bad as the worst in So CA. The better areas are quite safe. Gangs are active, but nothing like So CA. The barrio areas are surprisingly safe, actually.

The Tex-Mex food is the best on the planet.

Answer 2

Work with a national lender like Wells Fargo, Washington Mutual, Countrywide, BofA, etc. Use their Web sites to compare products by region and understand pricing in each market. When you get to the point of actually wanting a loan, then compare the products offered by the lender to those of a local mortgage broker. Use housevalues, zillo or realtor.com to get ballpark pricing.

San Antonio and SoCal might as well be on different planets. They are on opposite ends of the spectrum in terms of cost of living. You could buy a home in SA with what you're paying in rent in SC. It really comes down to quality of life, family and job opportunities. SA is a nothing town, with a small job market, no beach, no culture, little entertainment, etc. But, if all that is important is that you can buy a home, raise a family and live a quiet and anonymous life, it may be for you.

Answer 3

Careful, thier is a rule in Texas about refinancing. Here is a breif summary of some of the laws

Texas protections

In order to prevent any lender from targeting vulnerable borrowers, Texas instituted a number of consumer protections when it opened the home equity market for the first time in 1998.

To preserve equity, Texas capped the amount borrowed at 80 percent of the home's value and prohibited home equity lines of credit.


To enable consumers to pay off high cost loans early if they wish, Texas prohibited prepayment penalties.


To impede "loan flipping" (multiple refinance transactions with high fees that strip equity each time) a consumer may only refinance a home once a year.

Answer 4

different mortgage solutions exists, I have outlined some below

(I would also suggest you read : http://umgarticles.atspace.com/mortgage.htm)

Pension Plan
Using a pension plan to accumulate the balance of your mortgage is a tax free saving scheme. The balance of your house will be saved over a period of time until you can pay your final balance. If you do intend to use a pension fund to save for the balance of your house, consideration should be taken into account to open another pension fund for retirement purposes too.

ISA Plan
With an ISA plan you invest in stocks and shares via an Individual Savings Account (ISA) - which is a tax-free method of saving. This method of saving may not be suitable for most borrowers. Before considering this option you should consult with an independent financial adviser.
Endowment
An endowment is still the most common type of interest only mortgage which also provides life assurance cover and a fixed payment for investment. The endowment policy along with the interest only mortgage should in effect end at the same time, leaving you with the ownership of your home and nothing to pay. Endowments have undergone much criticism; this is due to investors being promised high returns from their investments. However lately this has not been the case, borrowers have found their investments have been as good as expected and a shortfall in the end amount of invested cash will not match the amount owed on the current property.
Taking into account the recent problems that have arisen regarding endowment policies it is worth remembering that returns on endowment policies have been pretty good, however you do need to see the term out in full. Also endowments do provide life assurance as part of the actual policy, so in the unfortunate event of a death the mortgage balance is paid in full.
Advantages of an interest only mortgage
• Your investments and savings could accumulate more than the required amount to cover the final payment; this could leave you more cash for your own personal use.
• Some plans have good tax benefits and help reach the required amount it a quicker and cheaper rate.
Disadvantages of an interest only mortgage
• In the unfortunate event of your investments not acquiring the designated amount of cash to cover the loan repayment, the investor could face a shortfall which they will then need to pay. If you are worried about a shortfall on your investment, you should keep in touch with your investor and request regular updates on the situation of your endowment. If the worst comes to the worst, you can increase payments to compensate for the loss of investment.
• Cashing in your endowment, ISA or pension could have adverse effects on the amount of money you have saved over the past however many years. If you do decide to cash in any existing policies you may be subjected to a penalty, this could be a cash amount specified by the investment company/lender. Please seek professional advice if you are worried about the end results of your finances, don’t be too hasty as most policies accumulate more of the cash in the final year

for a complete informational package I suggest you visit one of the many mortgage informational sites the best free one in my opinion is :

also read http://umgarticles.atspace.com/mortgage.htm

Answer 5

first thing monday morning call kevin johnson with realty mortgage. 972-396-9300. He is a mortgage broker i work with and trust with ALL my clients. he will set you straight. I can refer you to an agent here in texas or ca if you need it. tell kevin dan roemer told you to call.

Answer 6

If you go with a Broker that underwrites in both states you will not have a problem with getting a pre-approval. Housing is higher in CA as you already know....If you stay in CA you have some options...Pick-a -payment Options, Interest Only for 2,5, + years. Once you are pre-approved, the market in each area does not change...The only thing is, you will need to do a letter of explanation as to your changing jobs, since you need 2 yr job time, income, etc so a lender can get a "feel" of your situation. FHA does have different loan sizes per the market you live in.

Here is some helpful information.

Decide on how much you want to spend, if you want to escrow the taxes and insurance. Say the taxes are 1200 a YR and insurance 800 a year (just an estimate, ok) That is 2,000 a year divided by 12 = 166.66 If you paid 1,000 a month now - (166.66) your P/I Principle and Interest would be 833.34. Now you decided on the price range you are looking into. If you have great credit, a 1 loan at 130,000 at a rate of 7 percent over a 30 year time would be 864.89 - This is just a estimate - ok -

It greatly depends if you need help with closing cost, (The seller could do Seller Help toward your closing cost). If that is the case, I normally tell my clients NOT to hackle over the price, since you are asking for closing cost help - especially if the home is thru a realitor, and the seller has to pay the realitor their fee which runs from 2-6 percent of the selling price, and you ask for 4-5 percent toward closing cost -assistance) Follow me so far??

Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score.

By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). This will tell you the up-front closing cost (etc) associated with your loan. This is a estimate only - not the final - but it does help you figure things out.

A 100 percent loan - is not totally out of your reach - There are FHA programs, payment assistant programs to help you. Look at your middle credit score, if you do not know your credit scores - have your lender tell you, or pull your credit from the 3 credit reporting agencies - BUT the person you are working with should tell YOU.

Lenders look at the middle score to qualify a person - and if your credit is low, than you will be going SUB-Prime, and any amount over 80 percent does not have MI - There are alot of companies I underwrite for that does NOT charge MI - normally the rate is slightly higher. Say you got qualified and your rate was 8.50 at par (Par, means that is what rate the lender quotes you, with no addon's to the rate for the lender to make pts on the back - some Lo"s add pts on the rate to make their money - instead of charging it up front). The 8.50 does not have MI included.


FHA loans have MI included, Conforming A+ borrower's loans have MI included, but the rates are better starting in the mid to high 6's (with rates going up.) The more money you borrow - the higher the rate normally. There are alot of factors involved.

With a government loan - collections and judgements will have to be paid (most ppl do not know that) but for FHA it is true....

Good Luck to you - A Broker, who cares, will go over it all with you and be in contact with you daily. The one on one customer service is important, to you, the client, to let you know the whole loan process.

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

Welcome to the USDA Income and Property Eligibility Site
1. This site is used to determine eligibility for certain USDA home loan programs. In order to be eligible for many USDA loans, household income must meet certain guidelines. Also, the home to be purchased must be located in an eligible rural area as defined by USDA.
To learn more about a USDA home loan program, click on the Loan Program Basics link on the left side of this screen and select one of USDA's home loan programs.
To determine if a property is located in an eligible rural area, click on the Property Eligibility link on the left side of the screen and select a Rural Development program. When you select a Rural Development program, you will be directed to the appropriate property eligibility screen for the Rural Development loan program you selected.
To determine income eligibility of an applicant/household, click on the Income Eligibility link on the left side of the screen and select a Rural Development program. When you select a Rural Development program, you will be directed to the appropriate income eligibility screen for the Rural Development loan program you selected.
To find out how to apply for a Rural Development Loan, click on the Contact Us link on the left side of the screen and then select a Rural Development Loan program.


Rural Housing Direct Loans are loans that are directly funded by the Government. These loans are available for low- and very low-income households to obtain homeownership. Applicants may obtain 100% financing to purchase an existing dwelling, purchase a site and construct a dwelling, or purchase newly constructed dwellings located in rural areas. Mortgage payments are based on the household's adjusted income. These loans are commonly referred to as Section 502 Direct Loans.
2. Purpose: Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.
Eligibility: Applicants for direct loans from HCFP must have very low or low incomes. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Click here to review area income limits for this program. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance, which are typically within 22 to 26 percent of an applicant's income. However, payment subsidy is available to applicants to enhance repayment ability. Applicants must be unable to obtain credit elsewhere, yet have reasonable credit histories. Elderly and disabled persons applying for the program may have incomes up to 80 percent of area median income (AMI).
Terms: Loans are for up to 33 years (38 for those with incomes below 60 percent of AMI and who cannot afford 33-year terms). The term is 30 years for manufactured homes. The promissory note interest rate is set by HCFP based on the Government’s cost of money. However, that interest rate is modified by payment assistance subsidy.
Standards: Under the Section 502 program, housing must be modest in size, design, and cost. Modest housing is property that is considered modest for the area, does not have market value in excess of the applicable area loan limit, and does not have certain prohibited features. Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards. Manufactured housing must be permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards.
Approval: Rural Development officials should make a decision within 30 days of the Rural Development office's receipt of the application.
Basic Instruction: 7 CFR Part 3550 and HB-1-3550


Section 502 Guaranteed Loan Program:
1. Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.
Eligibility: Applicants for loans may have an income of up to 115% of the median income for the area. Area income limits for this program are here. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance. In addition, applicants must have reasonable credit histories.
Approved lenders under the Single Family Housing Guaranteed Loan program include:
Any State housing agency;
Lenders approved by:
HUD for submission of applications for Federal Housing Mortgage Insurance or as an issuer of Ginnie Mae mortgage backed securities;
the U.S. Veterans Administration as a qualified mortgagee;
Fannie Mae for participation in family mortgage loans;
Freddie Mac for participation in family mortgage loans;
Any FCS (Farm Credit System) institution with direct lending authority;
Any lender participating in other USDA Rural Development and/or Farm Service Agency guaranteed loan programs.
Terms: Loans are for 30 years. The promissory note interest rate is set by the lender.
There is no required down payment. The lender must also determine repayment feasibility, using ratios of repayment (gross) income to PITI and to total family debt.
Standards: Under the Section 502 program, housing must be modest in size, design, and cost. Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards. New Manufactured housing must be permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards. Existing manufactured housing will not be guaranteed unless it is already financed with an HCFP direct or guaranteed loan or it is Real Estate Owned (REO) formerly secured by an HCFP direct or guaranteed loan.
Approval: Rural Development officials have the authority to approve most Section 502 loan guarantee requests.
Basic Instruction:7 CFR Part 1980.