Best Definition of Home Loan - Using Leverage for Wealth Creation
Some people still think a 20% down payment is required to qualify for a home purchase loan.
This is a mistake that often keeps first-time home buyers from purchasing a home early, and the delay can result in them being priced out of the market for the type of properties they really like.
The reality is: there are enough different types of home loan programs with various financial assistance and resources to support the home purchase, particularly for first-time home buyers. Society as a whole, like every household owns its homestead as a hedge against inflation, funds for retirement, or as a generational wealth builder. The idea is equity equality for all.
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As a mortgage broker, we work steps further to make your real estate purchase dream comes true -
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We have a network with the wholesale department of a wide range of direct lenders and banks, we have access to all currently available loan programs and are familiar with the different features and guidelines.
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Besides, matching our client's financial situation with the most suitable loan product, we also find them the best possible rates among the most reliable lenders.
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Most of all, unlike a bank that will give you a loan if you qualified the in-house guidelines, as a mortgage broker we help you solve the potential problems and work with you to get a loan with the best possible rates.
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Conventional Loans
AKA FannieMac & FreddieMae Agency Loan
Limited to Conforming & High Balance Loan Amount
If you have tax returns to verify the qualified income, this is your best choice. It offers the best interest rates, no or low reserve requirements, and friendly lending guidelines, especially towards owner-occupied first-time home buyers.
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Applications - Owner occupied, second home, or investment property. 1 - 4 units.
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Key Features
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Low down payment of 3% to 5%, with low mortgage insurance.
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Can add on top with a downpayment assistance program. The total loan amount can be as high as 105% of the purchase price.
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1-year tax return-only program is available for self-employed borrowers.
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Low or No reserve requirement, depends on credit profile.
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Gift fund and co-borrower allowed.
FHA Loans
A Federal Housing Administration (FHA) is insured by the federal government, allowing borrowers a higher debt-to-income (DTI) ratio and lower credit score.
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It imposes an upfront mortgage insurance as high as 1.75% of the total loan amount, which mostly is bundled into the loan amount. It also has higher monthly mortgage insurance. But, it offers lower interest rates compared to Conventional Loan, which could offset the larger amount of mortgage insurance.
Key Features
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Low down payment of 3.5%, with low mortgage insurance.
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Can add on top with a downpayment assistance program. The total loan amount can be as high as 105% of the purchase price.
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Allow lower credit scores, minimum score 580.
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FHA is an assumable loan.
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Streamline refinancing program.
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Lower interest rate, higher mortgage insurance.
VA Loans
VA loans are for military veterans, active servicemembers, surviving spouses and some reservists. Up to $2 million in funding may be available in high cost areas.
Key Features
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100% purchase price loan amount available with full entitlement.
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Higher debt-to-income ratio, 55%.
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Allow lower credit scores, minimum score 580.
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Cash-out and streamlined rate-term refinancing
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Lower interest rate, lower mortgage insurance.
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Can have non-veteran co-borrower.
CalHFA Downpayment
Assistance Program
My Home - 3% interest-free down payment assistance program.
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California Dream for All - 20% interest-free down payment assistance program.
Key Features
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Build on Conventional or FHA 1st loan.
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Competitive interest rate.
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No mortgage insurance
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The downpayment assistance amount is interest-free but requires payback when the property is sold.
Jumbo Loans
When loan amount is bigger than the conforming and high-balance loan amount
Moving up to a bigger home, building a luxury custom, or shopping in a high-cost area? Our Jumbo loan program might be the solution! In addition to owner-occupied homes, we offer Jumbo financing for vacation and investment properties.
Key Features
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Loan Amount up to 3 Million
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Up to 80% Loan to Value.
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Excellent rates for higher credit scores.
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Lower interest rate, lower mortgage insurance.
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Can have co-borrower.
Bank Statement Loans
For self-employed borrowers. Instead of using tax returns for income verification. This program uses average deposits from the business bank account(s) as gross income.
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Options are using a 12-month or 24-month average of deposits as gross income. The expense ratio range from 35% to 50% based on industry standard.
Key Features
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Interest rates are higher than government loans.
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Standard 6-month reserve requirement.
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Tax and insurance impound required.
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Maximum LTV 85% - 90%.
Investment Property DSCR Loans
For purchasing real estate investment property only.
Using ration derived from subject property rental income divided by total debts of the property (principle + interest + tax + insurance ).
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The standard qualifying ration is 1:1
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Key Features
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No tax return, and no bank statement required.
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Interest rates are higher than government loans.
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Standard 6-month reserve requirement.
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Tax and insurance impound required.
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Maximum LTV 80%
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Foreign national OK
2nd Mortgage Loan
Using the home equity while keeping the low-interest rate 1st loan, the 2nd stand-alone mortgage is the perfect solution.
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It is a fully amortized loan with fixed rate. LTV can go up to 90%
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Key Features
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Standard Fannie/Freddie/FHA home loan guidelines apply.