The maximum loan in Orange County for conforming loans is $417,000. It is possible to do a higher loan amount
under the "high balance" loan program available in certain counties throughout the state.
The maximum loan amounts by county are set by Housing and Urban Development (HUD) and information can be found
by clicking
here. Terms may be for 30, 20, or 15 or 10 years.
The 15 and 10 year fixed rates offer better pricing with all lenders for both conforming
and jumbo. All these A-paper loans normally require a minimum of a 620 mid score
of the primary borrower as well as minimum tradeline requirements to pass through
automated underwriting. We have seen a few get through with compensating factors
in a strong application.
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On the other hand, adjustable rate loans
can be advantageous for short periods, and we recommend them if you are planning
to stay in your property for a few short years. Often, because of the initial low
interest rate, it is easier for some borrowers to qualify for financing when buying
a home. For others, this is the only type of loan they can qualify for due to their
debt to income ratios.
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Although the initial rates can be quite low, because of the periodic increases to
the interest rate, the rate can exceed the rate of a 30 year fixed rate in a few short
years, after which time, it is likely that you would want to refinance.
In the case where you have some derogatory credit items and don't qualify for that
30 year fixed rate, the ARM is usually what most borrowers will opt for, to help
them get back on track. After enough on time payments have been made, the loan can
be refinanced into the 30 year fixed at a later date.
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High Balance loans are loans which exceed the conforming loan limit which in Orange County and LA County is $729,750. A loan exceeding this amount and less than the maximum allowable loan limit for the county ($729,750) can still receive an interest rate that is just a shade off the loan amounts under $417,000 and not have to take a jumbo rate. Most lenders have a fixed 30 and 15 year high balance products, along with 5/1 and 7/1 ARMS as well. Loans above the max loan amount for the county fall into jumbo territory and receive different pricing.
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Hybrid adjustable rate mortgages include the 5/1, 7/1, or 10/1
ARMs, in which the interest rate will stay fixed for 3,5,7 or 10 years,
after which time the rate will become variable and adjust periodically. The periodic
change up or down is tied to an index which is usually the 1 year Treasury-Bill,
or LIBOR. You get a margin which is fixed for the life of your loan. This is added
to the index to determine your current rate. (There are annual and life caps). The
main advantage with these loans is the better interest rate that you get over the
straight 30 year fixed conforming or jumbo rate. Interest only is an option with
most of these products.
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These loans are more accomodating for those who aren't sure how long they plan to
keep their property, but do plan on selling at some time in the future. Some homeowners
feel that it doesn't really matter if they're not chipping away at any principal
while their home is appreciating in value since they won't be there that much longer.
If your goal is lowering your monthly payment, then the interest only option will
certainly do this for you.
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No-income qualifier loans or Stated income loans are virtually non
existant in the current mortgage marketplace. I have one niche lender who can do this
kind of loan on a 5/1 ARM product. A minimum 700 credit score is required. Please inquire for more details on this
product.
Index Zero downpayment
financing is no longer available unless you are a veteran. Qualified
vets can purchase a home at 100% of the purchase price. FHA financing
allows you to purchase with a small 1/2% downpayment. This program came out
early in 2013.
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We also offer loans for manufactured homes.
This may include modular housing in which the home is built in a factory to your
specifications and then hauled out onto the lot which you have chosen. The home
is permanently fixed to the foundation, and normally the passer by cannot detect
the difference from this type of housing unit from a site built home.
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