Whether considering a Sonoma County purchase loan or a Sonoma County refinance loan there are many different loan programs to choose from. Sonoma County loans are made up of 30 year fixed-rate mortgages, other fixed-rate loans and of course arms. Each loan program has its unique benefits to help consumers qualify for home mortgage financing. The following programs are available in the marketplace:Conventional loans are your most standard basic mortgage loan. They were require a 20% down payment or 20% equity in the home, although lately we are looking for 25% equity for the best possible Sonoma County mortgage rate. The minimum credit score required for this type of mortgage loan is 620. As a direct mortgage lender in Sonoma County we like to see typical ratios of 31/36. Meaning 31% of the borrower's gross monthly income goes to the housing payment and 36% of the borrower's gross monthly income goes towards the house payment and any other debt paid on a monthly basis, ie credit cards, auto loans, other unsecured debt etc. Conventional loans allow a 3% seller concession for primary residences payable towards the closing costs.The same exists for second home purchases. Investment property purchases allow for only a 2% seller concession for closing costs. Anything less than 20% down on a primary residence or on a second home will acquire mortgage insurance. In fact 90% financing is available for a primary residence or for a second home with a credit score minimum of 700. Paying off debt to qualify for the mortgage is permitted on a case-by-case basis. To get the best Sonoma County mortgage rate the lender is also going to require six months of reserves in the bank. This means six months of mortgage payments liquid. With regards to gifts on conventional loans, if the gift is not 20% down, 5% of the down payment must be from the borrowers own funds. Gifts are not permitted on investment property purchases. Conventional loans in Sonoma County will go to $417,000 and up to $520,950. Conventional loans usually take no longer than 30 days, but can be done in 20 to 25 days. Here is the Conventional county by county loan limit chart.Another very popular loan program for Sonoma County mortgages are FHA loans. Lots of folks seeking preapprovals to purchase a home get FHA loans. FHA loans unlike conventional loans always contain two forms of mortgage insurance. The first mortgage insurance premium is called the UFMIP. This stands for upfront mortgage insurance premium. It is 1% of the loan amount financed into the loan and amortized over the life of the loan or 30 years if the mortgage is a fixed-rate 30 year loan. The second mortgage insurance component is based on .90% of the loan amount before the upfront mortgage insurance premium is calculated. This is the component that is removable after five years as required by HUD followed by a minimum equity of 22%. The big benefit about FHA loans for Sonoma County mortgages is that the down payment required for preapproval to purchase a home is 3.5%. Yes, that means on a $300,000 house in Sonoma County the only down payment required is $10,500. The down payment can be a gift, can come from the borrowers own funds or can come from the sale of a good. For people doing refinance transactions FHA loans will go up to 85% of the value of their home to pull cash out. Back to the preapproval side, FHA loans also allow for non-occupant co borrowers to help the primary borrower qualify. The typical ratios we like to see on these mortgages is 36/43. These programs will typically however, go as high as the 50% debt to income ratio with a 40% housing ratio. For getting a Sonoma County preapproval an FHA insured loan makes a terrific option. FHA loans are also assumable which means assuming a borrower can qualify they can assume the mortgage payment for another borrower. FHA streamline refinances are for folks who already have FHA loans. They could refinance with no closing costs and no appraisal need. Another terrific source for FHA financing for unique properties are FHA 203K loans these FHA loans are rehabilitation loans and will finance up to 120% of the value the property to fix up the home for the borrower. FHA loans are only available on primary residences and you can only have one FHA insured loan taken out any given point in time. FHA loans in Sonoma County will go to $417,000 as well as to $662,500.FHA loans take typically 25 days to close escrow. Here is the complete county by county loan limit list.For veterans there are VA loans.VA loans require a minimum credit score of 640 and they offer 100% financing. There is no mortgage insurance paid ever. These loans truly require no money down. These require a document the veteran should possess which is called a California certificate of eligibility. With VA loans in getting preapproved to purchase a home in Sonoma County, the property must have a clear pest report, and there is also no earnest money required either however, if the borrower chooses to pay earnest money they will get these funds refunded to them at the close of escrow or these will be applied towards their closing costs to purchase the property. Seller concessions of up to 6% are available to cover closing costs, but the full credit must be used. There is a 2.15% VA guarantee fee which is financed into the loan over the loan term. VA guarantees the loan they don't insure them. These loans are only available on primary residences.Home Path Loans are a more recent loan program that have come out in the last few years. Home path loans are only available on properties that are owned by Fannie Mae. The home path loan product is directly available through Fannie Mae and as a result the property being purchased in Sonoma County must be owned by Fannie Mae. Homepath loans are an option for folks seeking to purchase a home in Sonoma County by getting preapproved. Fannie Mae home path loans require no mortgage insurance of any kind and they also do not require an appraisal. The purchase contract serves as the medium for valuation. The down payment required on home path loans is 3%. The financing and terms however do improve by putting 5% down. These loans offers seller concessions up to 3% of the purchase price and are only available for primary residence purchases. Give me a telephone call Scott Sheldon and I can let you know if the property is owned by Fannie Mae, the direct line 707-217-4000. These take approximately 30 days to close escrowThe last loan program in Sonoma County are jumbo mortgages. These are done primarily up to 60% loan to value with 745 scores in the best interest rates are available on short-term financing not 30 year fixed rate loans. The maximum Sonoma County jumbo loan amount is $3 million. These typically require two appraisals and take upwards of 45 days to close escrow.There are several different loan programs available today in the marketplace to get a Sonoma County preapproval or a Sonoma County refinance loan. Make sure to provide your loan officer with everything they need to close your loan as fast as possible. Here is a list.This means proactively obtaining updated bank statements etc. as needed to ensure an expedient close of escrow for your Sonoma County mortgage. You can give me a telephone call Scott Sheldon at 707-217-4000 or you can e-mail me ssheldon@firstcal.net. I can help you close your mortgage loan quickly and efficiently because I have direct access to my underwriter who works side-by-side with me in person at my office. Most mortgage companies' origination and underwriting departments are separate. Mine is not. In taking out a Sonoma County mortgage loan this can prove to be a great benefit to consumers involved in the financing of Sonoma County real estate.
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