Home Loan Tips for Livermore Valley!

Will you start the new year with a new Livermore Valley home? If you’re thinking of becoming a homeowner during 2012, there’s good news: the Federal Housing Administration could help you. FHA-backed mortgages in California are alive and well, thanks to a reinstatement of higher loan limits effective last month.

There’s a common misconception that FHA loans are only available for first-time homebuyers, or that income limits apply. Not true! However, there’s a limit on the mortgage amount itself. Now through 2013, that limit is as high as $729,750 for some areas of Alameda County, for a single-family residence.

Why go with a FHA-backed mortgage? For openers, your down payment requirements are lower. Your down payment could be as low as 3.5%! FHA also allows you to have down payment assistance from your family or employer.

With FHA loans, you will have a monthly mortgage insurance premium added to your payment. The mortgage insurance protects the lender in case you default on the loan. Basically, the government isn’t loaning you the money directly; but they are promising to repay the lender if you don’t. They collect a monthly insurance premium from you to fund an insurance pool for that purpose. In turn, this gives the lender additional security on the debt, which helps keep credit available for home buying.

FHA loans are also more forgiving concerning credit scores. You should always keep your credit history in the best possible shape, but with FHA, a past blemish won’t sink your chances of a mortgage.

To find out more about FHA-backed mortgages, you can visit the FHA questions and answers page on HUD.gov. You should also talk to local mortgage lenders. They will know the guidelines that apply to you and the local area.  Getting pre-approved for a mortgage is an important step in becoming a Livermore Valley homeowner!

As your Livermore Valley real estate professional, I study our local markets and keep on top of the real estate news. When you’re buying or selling a home in Livermore, Pleasanton or Dublin, I’ll be ready to help you! Always feel welcome to contact me with your real estate questions.

John Kurtzer
Your Livermore Real Estate Expert
RE/MAX Accord

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