As an FHA licensed California mortgage company, we are privileged to offer our First-Time Home Buyer community with FHA programs that provide the American Dream of home ownership.
With flexible credit history guidelines, low down payment requirements, competitive mortgage interest rates, and common sense underwriting practices, FHA mortgage loans are designed to meet the needs of many First-Time Home Buyers.
We understand how overwhelming buying your first home can be. There are literally hundreds of questions that our clients uncover as they start their initial mortgage and real estate related research.
While we do spend a significant amount of time updating our blogs and home buyer packets with the most relevant and valuable information necessary for our clients’ to feel confident that they are making the most educated decisions, our main goal is to earn your trust through communication and service.
Please feel free to contact us directly at any time via phone, email, or online application form if you desire personal attention gaining a better understanding of some of these complex details.
First Priority Financial 951-506-4663
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FHA First-Time Home Buyer Basics / FAQ
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What is a Mortgage?
A mortgage is simply a financial agreement with specific terms of re-payment between a borrower and bank or investor where real property (home) is used as the collateral to secure the debt.
Where does mortgage money come from?
There are many different types of mortgage loans that are either backed by an individual bank’s deposits (portfolio loan), or funded by a group of investors through complex relationships on Wall Street which involve Mortgage Backed Securities, Government Sponsored Enterprises (GSEs) such as Fannie Mae and Freddie Mac, and other financial institutions on the secondary market.
Basically, investors or banks set the guidelines on the mortgage money that they lend to homeowners. If a borrower has less than 20% equity in a property, then a separate mortgage insurance policy is required which usually has another set of qualifying guidelines associated with it.
Does the FHA fund mortgage loans?
No, The Federal Housing Administration (FHA) is a US Government agency that was created in 1934 as part of the National Housing Act of 1934 for the purpose of stabilizing the housing market by providing adequate insurance on mortgage loans.
Basically, the FHA insures lenders if a borrower defaults on mortgage payments or goes into foreclosure.
However, FHA insurance guidelines are more flexible and cost-effective for most First-Time Home Buyers.
In order to originate and fund FHA insured mortgage loans, mortgage companies have to meet strict licensing requirements that include special FHA audits, as well as state and federal regulation.
If you can gain anything from this short history lesson, working with an FHA licensed mortgage company should make you feel a little more safe and confident in the professionals you are trusting with your mortgage transaction.
How do I qualify for a California FHA Mortgage?
To qualify for an FHA mortgage, underwriters will evaluate the following factors:
- Amount of mortgage loan amount
- California FHA lending limits
- Borrower’s income, employment and other personal documentation
- Borrower’s credit worthiness
- Borrower’s initial down payment and funds to close
- Appraisal and other property conditions
How do I find the right home?
First-Time Home Buyers looking to qualify for an FHA mortgage need to pay close attention to a few FHA appraisal requirements that may impact the approval. If you are interested in purchasing a foreclosure or short sale that may need some rehab work, then an FHA 203k mortgage is a special program that provides for funds to make that possible.
We strongly suggest that you work with an experienced real estate agent who knows how to find the best listings available that will meet our guidelines.
What are the main benefits of buying a California home right now?
Besides the fact that FHA mortgage rates and property values are very low, there is the revised $8000 First-Time Home Buyer tax incentive that sweetens up the deal and the $6500 Move-Up Buyer Credit.
While it is certainly understandable to be cautious about the potential for future decline in property values, the low rates should make up for the difference in any short term losses. Keep in mind that if rates increase an additional percentage point, it could have a significant impact on your monthly mortgage payment and cost of the life of the loan.
What is my next step?
Great question! It is important to present an offer to a seller once you have had the opportunity to get a full mortgage approval from your mortgage lender.
Since the mortgage processing and approval process may take a few weeks to work out any underwriting challenges or questions, it will strengthen your negotiating position when you have an underwritten bank approval when submitting your offer to a seller.
We work through a full financial strategy session with each of our clients before sending them out to find a new home. Just as your real estate agent’s mission is to protect your interests with regards to your property investment, your loan officer has a fiduciary responsibility to make sure you obtain an affordable mortgage loan that you can feel safe and secure paying on over time.
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Top 5 California Mortgage Links / Articles / Questions
- California First-Time Home Buyer Frequently Asked Questions
- California Mortgage – How Much Can I Borrow?
- What Are The Current Mortgage Interest Rates?
- Applying For A California Mortgage – What Documentation Do I Need?
- How Does The Mortgage Approval and Funding Process Work?
First Priority Financial
3700 Hilborn Rd #700
Fairfield CA 94534
951-506-4663 | Email
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