Rapid Rescore a Great Way to Raise Your FHA Loan Credit Score in California is a post from: FHA,VA and Conventional Home Loans in all 50 States

It’s amazing how many really minor credit issues can keep down a home buyers credit score and prevent FHA loan approval in California.   However, there is a really great tool FHA mortgage loan officers can utilize in assisting you in quickly removing mistakes or making changes to boost your credit score, it is called “Rapid Rescore”.

When you would want to do a rapid rescore to improve your FHA loan credit score?

• Let’s say a collection just popped up on your credit and you know it’s not correct.  If you can all the creditor and get them to remove the collection, we can have your credit score updated in 2-5 days with your new score instead of waiting 30-45 days for the creditor to report this to the bureaus.
• One factor that hurts your credit score is the ratio of your outstanding balance to your credit card credit limits.  Let’s say you just paid a few of your cards down to 30% of the limits.  We just need your most recent statements and we can rescore your credit in 2-5 days with the new balances.  This can sometimes dramatically up your score.
• If a creditor mistakenly reporting a 30 day late on any account.  If you can call the creditor and get this removed, we can update your score in 2-5 days.

Those are just a few of many, many factors that can affect your credit score needed for the very best FHA loan interest rate (or conventional or VA interest rate).  For more detailed information on what affects your FHA loan credit score click on this link and read my in-depth article here: http://www.socalfhahomeloans.com/your-credit-history-and-applying-for-an-fha-loan/ 

So don’t hesitate to send me and email or give me a call if you have any questions about your credit score needed for FHA loan approval (or conventional or VA loan approval).  I have looked at thousands of credit reports over the years and analyzed them for borrowers and made suggestions and put them on the road to FHA loan approval.

Here are some highlights of FHA and conventional loans right now:

• FHA loan interest rates have recently dropped again and are even lower than former historic lows!
• Maximum FHA loan if California can get all the way up to $729,750 in many counties of California.  FHA loans in Los Angeles, San Diego, Orange County, San Jose and San Francisco can have very high loan limits.
• FHA loan down payment is only 3.5% and that can be a gift from a relative
• FHA home loan requirements allow a very lenient debt-to-income ratio of 56.9% where conventional loans are 41%-45% with less than 20% down.
• FHA loans do come with up front mortgage insurance that is rolled into the loan balance and monthly mortgage insurance for the first five years.

For more FHA loan information in California feel free to send me an email at homeloan8@gmail.com or call at 858-922-7899.

Warmly,

Rob Chomentowski

homeloan8@gmail.com

Sr. Loan Officer (FHA, VA and conventional loan specialist)

858-922-7899

Fannie Homepath Mortgage, Great Option to Buy In California is a post from: FHA,VA and Conventional Home Loans in all 50 States

I wanted to write another article about Fannie Mae Homepath Mortgages because it is such an incredible option for first time home buyers and ALL home buyers to get financing to buy a home in California today. 

As a refresher, Homepath is a home loan offered on all properties owned by Fannie Mae.  Fannie Mae is an organization that purchases loans from lenders such as us and securitizes them in the secondary market.  They purchase certain loans from lenders to allow lenders to keep making more loans to homeowners.  When a home owner defaults on a Fannie Mae owned loan and Fannie Mae forecloses on the property, they become the owner of that property and put it up for sale on the open market.  They offer special Homepath Mortgage financing on all of these properties.  And there are a lot of properties out there that are Fannie Mae owned.  So first thing to remember is it has to be a Fannie Mae owner property to get the special financing I am going to describe below.  

OK, now on to the features and benefits of Fannie Homepath Loans:

• Remember, it has to be a Fannie Mae owned home to get this special financing.  Your Realtor should be familiar with Fannie Mae listings and it will almost always say the property is Fannie Homepath in the MLS listing
• Homepath minimum down payment is only 3%
• Homepath mortgage financing is available on a wide range of properties in all locations in California; from higher priced coastal areas such as San Diego, Orange County, Los Angeles, San Jose, San Francisco….to lower priced inland areas such as Sacramento, Fresno, Inland Empire, and everywhere!
• The is NO mortgage insurance with Homepath Loans!  HUGE advantage!  No up front OR monthly mortgage insurance.  This compares favorably to FHA loans which have a 2.25% up front mortgage insurance cost and a .5 to .55 monthly mortgage insurance cost.  Standard conventional loans carry monthly mortgage as well.
• There is NO worries of condo eligibility with Homepath loans.  With FHA loans and conventional loans, condo projects have to pass a whole bunch of tests such as % owner occupancy, % hoa due defaults, hoa maintenance reserves.  Homepath Mortgage Financing requires NONE of these checks!
• There is NO appraisal required with a Homepath Loan.  This saves you the cost of an appraisal and the potential obstacles to financing an appraisal can create

So those are some of the advantages of Homepath financing.  Some of those are really huge advantages.  For instance you may be able to get a really great deal on a fixer homepath property with a low down payment that would not be financeable with an FHA or conventional.  Or you may be able to buy into a condo project you love with a low down payment that you would not be able to get a low down FHA loan on.  And lastly, the savings from not having mortgage insurance over the life of the loan can be thousands of dollars.

So I hope you enjoyed the article and please give me a call if you have any questions about Homepath Financing in California.  Call me at 858-922-7899 or homeloan8@gmail.com.

Warmest Regards,

Rob Chomentowski

homeloan8@gmail.com

Sr. Loan Officer (and Homepath, FHA, VA specialist)

858-922-7899

We are a direct lender offering Homepath Financing.

Two of the main benefits when you get a VA loan to buy a home vs. renting are; #1 when you buy, you get to deduct the VA loan interest + property taxes and pay less income tax.  And #2 when you have a fully amortized VA mortgage, every month when you make your mortgage payment, you pay down part of the principle of the loan, so that one day you will own the house free and clear with no mortgage.

Let’s take a $350,000 VA mortgage with a 4.75% 30 year fixed rate loan on your home purchase for example. In the first year you would pay down $5,522.33 of principle of the VA mortgage loan balance.  By year five you would have paid down $30,426.01 in VA mortgage principle.  In year 10 you’ll have paid down $68,990.39 of the VA mortgage balance. As long as your total housing payment (minus the tax break for buying) is close to what rent is for a similar property, this is a really big advantage over renting because you are gaining equity in the property every month vs. when you rent the rent money just goes up in smoke and pays down the landlords mortgage.

Additionally, if you were to add a little extra to your mortgage payment every month, you could pay your VA mortgage in California off dramatically faster and pay a lot less interest over the life of the loan. So you are working towards one day having no mortgage on your property and an extremely low payment that is just property taxes and insurance. This helps you retire in style and have fun and do the things you enjoy doing with a very low housing cost overhead!

In terms of the tax benefits when you get a VA loan to buy, a $350,000 VA mortgage would result in $16,625 a year in mortgage interest and $4,000 in property taxes that can be taken as a deduction off your income taxes.  A quick and rough estimate running the numbers shows this would save you $7,218 per year in income taxes you would pay if you were renting, that you now don’t have to pay because you are an owner.  $7,218 works out to be an EXTRA $601/mo you put in your pocket vs. paying to the Government in income taxes.  

You can also adjust your tax withholdings on your W-4 with your HR Dept once you buy because you have this large tax deduction and have them withhold less tax from your paycheck every month.  This would allow you to see a much larger net income every month vs. waiting until the end of the year for your refund.  

So the combination of the loan principle pay down + the mortgage interest and property tax write-off you get when you buy, give you a big advantage over renting if rent is close to your housing payment.

And a reminder of the great advantages of using your VA loan benefits to get a VA loan:

• VA loan credit scores do not have to be perfect, a 620 score can get you a top VA loan interest rate
• VA loan limits in California go up above $900,000 for 100% financing in certain counties.  And many cities and counties such as Los Angeles, Orange County, San Diego, San Jose and San Francisco have very high VA loan limits
• VA homeloans have NO monthly mortgage insurance, a big advantage over FHA and conventional loans
• VA lending requires NO down payment, the loans are 100% financing
• Interest rates VA loan are still at close to 50 yea historical lows
• VA loan streamline refinance allows you to drop into a low interest rate easily if you already have a VA loan
• You can get a second VA loan if you have paid off your first VA loan, even a 3rd, 4th etc… But you can only have one VA loan at a time

Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions or want to apply for a VA, FHA or conventional loan.

Warmest Regards,

Rob Chomentowski

Sr. Loan Officer (and VA specialist)

858-922-7899

homeloan8@gmail.com

Get a VA Loan in California and Pay Principle Down Vs. Rent to Landlord is a post from: VA,FHA and Conventional Loans 858-922-7899

Update on $8,000 Tax Credit Extension – Helps When Get FHA Loan To Buy In California is a post from: FHA,VA and Conventional Home Loans in all 50 States

Whether you get FHA loan or conventional loan to buy a home in California, you may have had your purchase contract signed before April 30th and you are in a race to get your home purchase closed by June 30th to make the deadline to collect the $8,000 home buyer tax credit or the $6,500 move up home buyer tax credit.   Well there is good news for you because it looks like the U.S. Senate is going to extend the deadline to close to September 30th 2010.

The June 30 closing deadline has not been extended yet…but it was accepted as an amendment to the Tax Extenders Bill. Under the amendment, borrowers who signed purchase contracts by April 30 would be given three extra months to close their loan and still qualify for the homebuyer tax credit. The new deadline would be September 30, 2010.
In a budget “point of order” vote taken this morning, the Senate actually voted against the bill that contains the homebuyer tax credit extension amendment. This forces the Senate Finance Committee, chaired by Senator Max Baucus, to rework the overall proposal before another vote is taken.
While this may be a cause of concern for borrowers who are awaiting a clear to close on their loan file, the “unanimous consent agreement” that set up the vote yesterday morning says that any amendments accepted into the Senate Finance committee’s version of the legislation would stand as long as the reworked bill is eventually approved by the Senate.  Thus, the homebuyer tax credit closing deadline extension proposed by Senate Majority Leader Harry Reid would stand if the Senate agrees on the reworked version of the proposal. This only applies to the Senate.  The House would still need to reconcile.

This is great for those who may be having their FHA loan approval taking extra long or are in contract to buy a short sale and it is taking extra long for the short sale approval.  The way it looks you should have until September 30th to close.

Here are some reminders about some of the benefits of buying you home with FHA loan in California or a conventional loan:

• FHA loan credit score does not have to be perfect, a 620 score can get you excellent FHA loan interest rates in California
• Maximum FHA loan in California is $729,750.  Many counties and cities in California such as San Diego, Los Angeles, Orange, San Jose, and San Francisco allow you to go all the way up to $729,750 with just 3.5% FHA down payment
• FHA loan vs conventional loan…FHA requires only 3.5% down payment, allows lower credit scores and higher debt-to-income ratios.  Conventional can be had with 5% down, no up front mortgage insurance but had much higher credit score and debt-to-income ratio standards
• FHA loan down payment minimum is only 3.5% and can be a gift from a relative
• FHA loan interest rates are STILL close to record historical lows!
• Conventional loan offer the Fannie Mae Homepath loan with as little as 3% down and no appraisal needed, see my earlier article about Homepath  (http://www.socalfhahomeloans.com/fannie-mae-homepath-loans-an-excellent-alternative-to-getting-fha-loan-california/)

Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions at all about getting approved for a FHA, VA or conventional Loan.

Warmest Regards,

Rob Chomentowski

Sr. Loan Officer

858-922-7899

homeloan8@gmail.com

During recessions and difficult economies, personal bankruptcies often rise as people lose their jobs and have difficulty paying their bills.  The most popular form of personal bankruptcy is a Chapter 7 bankruptcy.   The good news is active military and veterans can qualify VA loan to buy a new primary residence only two years after your bankruptcy 7 discharge.  So if you had a bankruptcy 7 around this time in 2008, you may already be to get a VA loan immediately.

There are few key points to remember if you have had a bankruptcy, or may soon have one, to start preparing yourself to apply VA loan:

1. Check the discharge date on your bankruptcy, not the date you initiated it.  This is the date the VA loan underwriter will check to make sure you are two years or more after for VA loan qualification
2. Make sure you are never late on ANYTHING after the bankruptcy.  If you have any bad credit after the bankruptcy it could cause you to be denied the VA loan.  This includes late payments, collections, charge-off’s, etc…
3. Try to re-establish credit as quickly as you can after the bankruptcy.   Maybe try to get a secured credit card from your bank or maybe a store card, or anything.  And just charge small items that you need on these cards and pay them off every month.  This will allow the VA loan underwriter to see that you have re-established lines of credit and you are showing a reliable payment history.

So in summary, all is certainly not lost if you have declared Chapter 7 bankruptcy.  If you follow my advice you can immediately be back on the road to getting VA loan approval and buying a wonderful primary residence in California for you to enjoy.

Some great advantages of California VA Loans:

• VA loan credit does not have to be perfect, even a 600 score can get you very good interest rates VA loan
• California VA home loan limits can go very high, and as high as $952,000 with 100% financing in certain areas and counties such as San Jose, San Francisco, San Diego, Los Angeles and Orange County.
• VA loan benefits allow veterans receiving any disability pay to have the VA funding fee waived.  This is essentially 100% financing at a low rate with no mortgage insurance!
• Underwriting to qualify VA is the most flexible and forgiving of any mortgage loan today
• VA homeloans are 100% financing, this means you do not need anything down and sellers are allowed to pay 4% of your closing costs.  So this means you could buy with almost no cash out of your pocket

Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions or want to apply for a VA loan.

Warmest Regards,

Rob Chomentowski

Sr. Loan Officer (and VA specialist)

858-922-7899

homeloan8@gmail.com

Get a VA Loan in California Two Years After Chapter 7 Bankruptcy is a post from: VA,FHA and Conventional Loans 858-922-7899

Magic of Principle Pay Down FHA Loans California is a post from: FHA,VA and Conventional Home Loans in all 50 States

Two of the main benefits when you get FHA loan to buy a home vs. renting are that when you buy you get to deduct the FHA loan interest + property taxes and pay less income tax, and when you have a fully amortized mortgage, every month you pay down part of the the principle of the loan. 

Let’s take a $350,000 FHA mortgage with a 4.75% 30 year fixed loan on your home purchase for example.   In the first year you would pay down $5,522.33 of principle of the FHA mortgage loan balance.   By year 5 you would have paid down $30,426.01 in mortgage principle.  By year 10 you’ll have paid down $68,990.39 of the mortgage balance.  As long as your housing payment (minus the tax break for buying) is close to what rent is for a similar property, this is a really big advantage over renting because you are gaining equity in the property every month vs. when you rent the money just goes up in smoke.  Additionally, if you were to add a little extra to your mortgage payment every month, you could pay your FHA mortgage in California off dramatically faster.  So you are working towards one day having no mortgage on your property and an extremely low payment that is just property taxes and insurance.  This helps you retire in style with a very low overhead.

Additionally, a $350,000 FHA mortgage would result in $16,625 a year in mortgage interest and $4,000 in property taxes that could be written off your income taxes.   A rough estimate is this would save you $7,218 in income taxes you would pay if you were renting that you now don’t have to pay because you are an owner.  $7,218 works out to be an extra $601/mo you have when you buy vs. rent.  You can also adjust your tax withholdings on your W-4 with your HR Dept once you buy because you have this deduction and have them withhold less tax from your paycheck.

So the combination of the loan principle pay down + the mortgage interest and property tax write-off you get when you buy, give you a big advantage over renting if rent is close to your housing payment. 

Here are some great benefits of FHA home loan California:

• FHA loan credit score does not have to be perfect to get the very best FHA loan interest rates
• FHA loan interest rates have dropped again to be close to historical lows
• Maximum FHA loan in many California cities and counties like Los Angeles, San Diego, San Jose, San Francisco, and Orange County go all the way up to $729,750.
• FHA loan down payment is only 3.5% and this can come from a gift from a relative
• FHA loan PMI (mortgage insurance) is tax deductible and can be taken off after 5 years

Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions at all about getting approved for a FHA, VA or conventional Loan.

Warmest Regards,

Rob Chomentowski

Sr. Loan Officer (and FHA specialist)

858-922-7899

homeloan8@gmail.com

As any buyer out there looking for a home to buy in California can see, there are a lot of short sales listed for sale.   It is very likely those active military and veterans that qualify VA loan and that are using their VA loan benefits, will be making offers on many short sales on their journey to purchase their home.   As a quick refresher, a “short sale” is when a seller is selling their home, but their home value is substantially less than the balance on their mortgage against the property.  In this case, the lender that holds the mortgage has to agree to take less than they are owed in the sale.

Buying a short sale is very different than buying any other type of sale.  Here are some tips and traps to look out for when buying a short sale as your new home in California with your VA benefits:

1. Short sales take much longer than normal sales to close.  They are getting better, but be ready for it to take 3-6 months from the time you get you offer accepted until the time you move into the property.
2. When you get a VA loan, a termite clearance is required.  Many times the bank agreeing to the short sale will not pay for termite work and the sellers many times do not have any funds to pay for these types of things.  Make sure your Realtor negotiates this up front on prepares you for this.
3. When you get a VA loan, you also have a VA appraiser appraise the property.  Many times the VA appraiser can ask for small items such as broken windows to be fixed prior to close.  Just like termite, many times the short selling lender will not pay for these items so be prepared.
4. There are certain closing costs a veteran cannot pay when they get a VA loan such as the escrow fee, loan processing fee, and loan underwriting fee.  Make sure your Realtor is aware of this and it is negotiated up front.
5. What happens with a short sale is after the seller accepts your offer, their short sale package gets sent to the short sale lender.  Once the short sale lender reviews the package including your offer, they will reveal what they need to “net” on the sale.  In other words the lowest amount they will need to walk away with of their mortgage balance they are owned.  Often times in a short sale, you can get all the way to closing only to find out the seller is “short to close”.   This means the seller has to come in with additional closing costs to close.  Many times the short sale bank will not budge from their NET and the seller does not have any money, so you can get a surprise and have more closing costs than you thought.  So make sure your Realtor works with the sellers Realtor to get a crystal clear estimate of closing costs as soon as possible after your offer is accepted.  This closing cost estimate document is called a HUD 1 or settlement statement.  Ask for this right away.

Short sales can present some extraordinarily great deals for patient California VA mortgage buyers out there.  So I hope my advice helps you be prepared when you make offers on short sales.

Keep in mind some of the wonderful advantages of VA loans for active military or veterans:

• If you qualify VA loan it is a 100% financing zero down loan.  It is the only 100% financing mortgage loan available today.  The next best is FHA with 3.5% down.
• VA loan 30 year fixed interest rates are still very, very low compared to historical norms
• California VA loans available with 100% financing all the way up to $600,000, $700,000 and beyond depending which county you buy in California.  This allows you to buy with VA 100% financing even in coastal areas such as San Diego, Los Angeles, San Jose, San Francisco and Orange County.  A VA loan over $417,000 is a jumbo VA loan.
• VA loan credit scores do not have to be perfect, you just need a 600 score to qualify.
• You can get a second VA loan (and 3rd, 4th, etc…) even if you have had a VA loan before, but you can only have one at a time.
• VA loan benefits include a waived VA funding fee for veterans if you receive any VA disability pay.  This is a savings of thousands and thousands of dollars
• VA lending has NO monthly mortgage insurance.  You have to put 20% down to get any other type of mortgage with no monthly mortgage insurance.

Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions or want to apply for a VA loan.

Warmest Regards,

Rob Chomentowski

Sr. Loan Officer (and VA specialist)

858-922-7899

homeloan8@gmail.com

Tips and Traps When You Get a VA Loan To Buy a Short Sale in California is a post from: VA,FHA and Conventional Loans 858-922-7899

Qualify FHA Loan 2 Years After Chapter 7 Bankruptcy is a post from: FHA,VA and Conventional Home Loans in all 50 States

During recessions and economic hard times, personal bankruptcies often rise as people lose their jobs and have difficulty paying their bills.  The most popular form of personal bankruptcy is a Chapter 7 bankruptcy.   The good news is you can qualify FHA loan to buy a new personal residence only 2 years after your bankruptcy 7 discharge.  So if you had a bankruptcy 7 around this time in 2008, you may already be to get a FHA loan.

There are few key factors if you have had a bankruptcy or may have one to start preparing yourself for FHA loan approval in the near future:

1. Look for the discharge date on your bankruptcy, not the date you initiated it.  This is the date the FHA loan underwriter will go off to make sure you are two years or more after for FHA loan approval.
2. Make sure under no circumstances are you late on ANYTHING after the bankruptcy.  If you have any derogatory credit after the bankruptcy it could cause you to be denied the FHA loan.  This includes late payments, collections, charge-off’s, etc…
3. Try to re-establish credit immediately after the bankruptcy.   Try to get a secured credit card from your bank or maybe a store card.  And just charge small items that you need on these cards and pay them off every month.  This will allow the FHA loan underwriter to see that you have re-established lines of credit and you are showing a reliable payment history.

So in summary, all is certainly not lost if you have declared Chapter 7 bankruptcy.  If you follow my advice you can immediately be back on the road to getting FHA loan approval and buying a wonderful primary residence for you to enjoy.

Some great aspects of FHA loans to remember:

• FHA loans in California can be had up to $729,750 with 3.5% down.  This allows you to qualify FHA loan even in expensive coastal areas such as San Diego, Los Angeles, Orange County, San Francisco, San Jose and more.
• FHA loan credit scores do not have to be perfect.  A 620 score is all you need to be considered.
• 3% of FHA loan closing costs can be paid by the seller
• FHA loan interest rates are still extremely loan compared to historical norms

Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions at all about getting approved for a FHA, VA or conventional Loan.

Warmest Regards,

Rob Chomentowski

Sr. Loan Officer (and FHA specialist)

858-922-7899

homeloan8@gmail.com

As we all are aware of, many homebuyers have gone through hard times the last few years with high unemployment rates and falling home values.  And some former home owners have lost their homes to foreclosure in the last few years.  The good news for VA eligible active military and veterans who are eligible to get a VA loan is that you get a 2nd chance. 

To get a California VA home loan after foreclosure, you only need to wait two years from the date of the foreclosure and you are technically eligible to apply for a new VA loan.   You will need to have the exact date of the actual foreclosure sale.  It will be two years following this date that you are eligible.  Generally this date will show up on your credit report next to the reporting of the foreclosure.  So if you had a foreclosure in say the spring of 2008, you are now possibly eligible to buy a new home with a 100% financing VA loan. 

You will still need to have at least a 600 credit score to qualify VA loan.  And you will have to have reestablished your credit.  Make sure you have absolutely no derogatory credit items following the foreclosure.  Do not be late on anything or have a collection items, charge-offs, etc…  The VA lender is likely to look more favorable on your situation if they see the foreclosure as an isolated event.  Also, you will need to have an explanation of why the foreclosure occurred and why it is likely to not happen again.

And here are some of the incredible and unique advantages of VA Lending for California VA Home Loan applicants:

• The VA loan limit in many counties of California can go up to $700,000 and above.  So you can still get a jumbo VA loan to buy in the more expensive coastal areas of CA such as San Diego, San Francisco, Los Angeles, San Jose, Orange County and more.
• VA loan interest rates are still hanging around their historic lows
• VA lending requires NO down payment.  They are 100% financing loans.  All other loan types such as FHA and conventional require down payments!
• VA homeloans have NO monthly mortgage insurance (unlike FHA loans and conventional that do)
• The guidelines are very flexible to qualify VA loan.  For a VA loan credit does not need to be perfect and debt ratios are much more flexible than FHA or conventional
• VA loan streamline refinances allow you to easily drop into a lower rate if you currently have a VA loan

Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions or want to apply for a VA loan.

Warmest Regards,

Rob Chomentowski

Sr. Loan Officer (and VA specialist)

858-922-7899

homeloan8@gmail.com

Get a VA Loan Two Years After Foreclosure in California is a post from: VA,FHA and Conventional Loans 858-922-7899

Get FHA Loan to Buy New Primary Home in California And Keep Your Current House is a post from: FHA,VA and Conventional Home Loans in all 50 States

Many buyers in California today currently own the home they live in, but would like to take advantage of today’s bargain prices and record low FHA interest rates to buy a new primary residence.  And they would like to be able to utilize the low 3.5% down payment required with FHA loans to buy their new primary residence.  This post will explain what you need to know to do this.

So in order to get FHA loan on a new primary residence in California you will need the following:

1. If you need to use the rent from the residence you are vacating as income to offset the housing payment to qualify for the new FHA loan, you will need to have 25% equity in the home you are vacating.  This means the total loan balance will have to be 75% of less than the current value.  The lender will determine this by doing an appraisal on your current home.  If you do have 25% equity, then you can use 85% the projected rent for your current residence.  The appraisal will also determine the average rents with a rent survey.
2. If you do not have 25% equity in your current house, you will need to qualify with your current house payment (mortgage + property taxes + insurance) PLUS the new housing payment for the house you plan get FHA loan to buy.  So will likely need to have a very healthy income and possibly little other debt to accomplish this.

One other thing to keep in mind when vacating your current home and keeping it and buying a new primary residence with an FHA loan, is if you are buying a house close by in the same neighborhood, the underwriter usually wants it to make sense.  For example you are moving from a smaller house to a larger house.  Or a house with no yard to a house with a yard.  Also, if you are moving closer to work or a different school district (but not to a larger house) this is acceptable.

Some additional advantages of getting FHA loan in California to keep in mind:

• FHA loan credit score minimum is generally about 620, it gets much more difficult to qualify FHA loan below this score.  Conventional loans require a 720 score for 10% down, so 620 is very forgiving.
• FHA home loan requirements for qualification are much more relaxed than 10% down conventional loans with 55% debt ratio  and 620 credit scores vs. 41-45% debt ratios and 720 scores for conventional
• FHA max loan amount is $729,750 in the coastal areas of California such as San Francisco, San Jose, San Diego, Orange County, Los Angeles and Santa Barbara
• FHA loan down payment is 3.5% which is the lowest of any mainstream mortgage loan out there today

Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions at all about getting approved for a FHA, VA or conventional Loan.

Warmest Regards,

Rob Chomentowski

Sr. Loan Officer (and FHA specialist)

858-922-7899

homeloan8@gmail.com