Tax Benefits and Loan Principle Pay Down Benefits of FHA Home Loans is a post from: FHA,VA and Conventional Home Loans in all 50 States
Two of the biggest reasons to buy a home vs. rent a home are the tax deduction benefits and mortgage principle pay down benefits of home ownership. 3.5% down FHA home loans can be the best way for many to accomplish home ownership and enjoy these two benefits.
First I will talk about the tax benefits of home ownership. The tax code in the United States allows home owners to deduct the mortgage interest and property taxes from their income. So let’s say for example you buy a $350,000 house with a 3.5% down FHA loan mortgage loan. In this case you will have a deduction at the end of the year of $17,050 in mortgage interest and $3,937 in property taxes for a total tax deduction of $20,987. And let’s say you pay 35% of your income in taxes. This means that with a $20,987 deduction you would be saving $7,345 per year with buying a home vs. renting, or $612 per month. So you could have a house payment of $612 more than your rent and you would be about even given the tax deduction available when you buy. You do not get any tax advantages or special write-offs when you rent.
Next let’s talk about loan principle pay down. When you get a FHA loan to buy a home, you are getting a 30 year fixed fully amortizing mortgage. What “fully amortizing” means is that every month a portion of your payment goes to interest and principle. So let’s use the same example above with a $350,000 house purchase with a FHA home loan and let’s assume your interest rate is 4.75%. Every month you make a payment on your FHA loan mortgage you would be paying roughly $450 towards principle. And every month as go into your 30 year FHA loan mortgage you pay a little bit more towards principle. So after one year you will have paid $5,263 of the FHA loan balance down. After 5 years $29,000 and after 10 years $65,700 and so on and so forth.
The point here is when you buy vs. rent, every month you are making progress on paying your loan balance off to eventually own the home free & clear with NO mortgage payment at all. When you rent you are not paying any balance down, 100% of your rent goes to pay your landlords mortgage off. You will never own your home free and clear with no mortgage payment by renting.
So when on a $350,000 house purchase when you combine $612 in tax savings per month with $450 in FHA loan mortgage balance pay down per month, that amounts to a $1,062/mo advantage over renting. This is how a home buyer can build wealth with buying vs. renting.
Don’t hesitate to give us a call at 858-922-7899 or email if you would like to be approved for a FHA loan mortgage.
Here are some of the very latest up-to-date benefits of FHA loans in California:
- FHA loan requirements only require three years to pass after a foreclosure to qualify for a FHA loan, conventional loans require seven years
- FHA loan limits in many counties in cities such as San Francisco, San Jose, Los Angeles, Orange County and San Diego allow FHA loans up to $729,750
- FHA loan credit score does not have to be perfect, give us a call and we can help you analyze your credit
- FHA loan interest rates are still near 60 year lows
Regards,
Rob Chomentowski
Sr. Loan Officer (and FHA, VA, conventional, Homepath specialist)
858-922-7899
homeloan8@gmail.com
FHA Loan Mortgage Highlights In California is a post from: FHA,VA and Conventional Home Loans in all 50 States
There are many benefits of using FHA home loan financing to purchase a home in California at today’s rock bottom bargain prices. Below are some of the highlights of FHA loans in California:
- FHA loan limits go up to $729,750 in many areas of California including Los Angeles, San Jose, San Francisco, Santa Barbara, Orange County and close to this limit in San Diego. So FHA loans can also be used to buy upscale homes in Coastal locations.
- FHA loan requirements allow for a non-occupant co-borrower. This means if you cannot qualify for a FHA loan on your own, you can get a co-borrower to help and they don’t have to live in the house.
- FHA loan guidelines allow for the most generous debt-to-income ratios of 55.9%. Conventional loans with less than 20% down are 41-45%.
- FHA loan interest rates are still at 60 year lows and can be slightly better than conventional loan rates
- FHA loan requirements allow for a homebuyer to buy a 2-4 unit property they plan to live in with just 3.5% down payment
- FHA loan down payment is only 3.5% and all of that can be a gift from a relative
- FHA loan guidelines allow for the seller to credit 6% towards the FHA buyers closing costs
- Your FHA loan credit score does not have to be perfect. Give us a call and we can assist you in improving your score to qualify for a FHA loan in California. We are experts at analyzing credit and assisting borrowers improve it quickly
- FHA loan are NOT just for first time home buyers! Anyone can use them!
So think about getting FHA financing in California to take advantage of California’s current record home affordability and some of the lowest prices in a decade. In many cases homes can be purchased for a payment lower than rent. That hasn’t been the case in about a decade. And that doesn’t even take into account the tax advantages and loan principle pay down.
So don’t hesitate to email us at homeloan8@gmail.com or call at 858-922-7899 if you have questions about getting approved for a FHA loan in California.
Regards,
Rob Chomentowski
Sr. Loan Officer (and FHA, VA, conventional, Homepath specialist)
858-922-7899
homeloan8@gmail.com
Requirements To Get FHA Loan After Foreclosure is a post from: FHA,VA and Conventional Home Loans in all 50 States
As we all know tens of thousands of home owners suffered foreclosures in California over the past few years. Well the good news is FHA loan requirements only require you to wait three years after your foreclosure to qualify for a FHA loan in California. There was a large spike in foreclosures in California beginning in the spring of 2008, so this means you may be eligible to get back in the market and buy your dream home in California at today’s rock bottom real estate prices across the state.
A key is to know the actual date the deed transferred out of your name back to the foreclosing banks name. FHA loan guidelines require three years from this date to pass. Give us a call at 858-922-7899 or email at homeloan8@gmail.com if you want to buy in California and we can look the date up when your deed transferred back to the bank on your foreclosed house.
If you had a chapter 7 bankruptcy and a mortgage was part of the chapter 7 bankruptcy, it is also three years after the bankruptcy discharge to get a FHA loan in California. Otherwise if you just had a bankruptcy with no mortgage in the bankruptcy, FHA loan requirements allow for you to get a FHA loan only two years after the bankruptcy discharge.
So in summary the great news is your can be right back in the market to buy a home with a FHA loan mortgage only three years after a foreclosure. And this time you can buy a today’s incredibly low California real estate prices where payments are LOWER than rent, and you will get a low interest 30 year fixed FHA home loan and set yourself up for success to pay the loan off and enjoy your home for many years.
Don’t hesitate to email me at homeloan8@gmail.com or call at 858-922-7899 if you have any questions or would like to be approved for a FHA home loan in California.
And below are some the most recent highlights of FHA loans in California:
- FHA loan down payment is only 3.5% and that can be a gift from a relative
- FHA loan requirements allow for a non-occupant co-borrower to help you qualify
- FHA loan guidelines allow for 3.5% down payment when you buy a 2-4 unit if you plan to occupy one unit
- FHA loan limits in California go up to $729,750 (which means you can buy a house for $756,000) in many areas of California such as San Jose area, San Francisco area, Los Angeles, Orange County and San Diego.
Regards,
Rob Chomentowski
Sr. Loan Officer (and FHA, VA, conventional, Homepath specialist)
858-922-7899
homeloan8@gmail.com
FHA Loan Credit Score Key In California is a post from: FHA,VA and Conventional Home Loans in all 50 States
The #1 thing that keeps many California FHA loan home buyers from utilizing 3.5% down FHA home loan to take advantage of buying a home in California at current rock bottom prices are issues with their FHA loan credit. FHA loan credit issues are the #1 thing holding them back from buying a home in the Golden. So this post with discuss some of the major factors with FHA loan credit scores.
Below I will discuss the most important items in keeping a good FHA loan credit score. But even if you think you have bad credit, give us a call or email because we specialize in helping FHA borrowers with credit challenges and assist them to get on the right track to raising their FHA loan credit so they can qualify for a FHA loan in California.
Keys to good FHA loan credit scores:
- Keep credit card balances at 30% or less than credit limits – the FHA loan credit scoring system likes to see this. The fastest and easiest way to vastly improve your FHA loan credit score is to pay balances down to 30%.
- Never be late on anything that reports to your credit – this may seem obvious but it’s not to most people. Car loans, credit cards, student loans, and mortgages all report payment history to your credit. Rent, mobile phone bills, insurance bills, utility bills do NOT report payment history to your credit. So pay the aforementioned first and never miss a payment. Late payments are the #1 item that drags down a FHA loan credit score
- Collections and judgments - if you have collections and/or judgments on your FHA loan credit report, do not pay them off until you speak to us. Paying these off actually LOWERS your FHA loan credit score. FHA loan requirements may only require you pay off large collections and will make you pay off all judgments, but wait until right before closing on your FHA home loan to do this.
We have a tool we use called Rapid Rescore to assist FHA home loan borrowers to quickly raise their credit score to where it needs to be to get a FHA home loan in California. This tool is very effective. What we will do is personally review your FHA loan credit score with you and figure out if there are items we can fix, and then we will use Rapid Rescore to quickly report these items to all the credit bureaus and get an update on your score in 2-5 days.
So give us a call at 858-922-7899 or email at homeloan8@gmail.com if you have any questions about getting approved for a FHA home loan in California.
Below are some of the very latest updates on FHA loans in California:
- FHA loan limits in go up to $729,750 in many areas of California such as Los Angeles, Orange County, San Diego, San Jose and San Francisco. This would allow you to buy a house for $756,000 with 3.5% down
- FHA loan mortgage debt-to-income ratios go up to 56.9% where conventional loans are 41-45% with <20% down. This allows for much more flexibility in qualification.
- FHA loan requirements allow a non-occupant co-borrower to help you qualify for a FHA loan
- FHA loan guidelines only require 3.5% down payment and this can be a gift from a relative
Regards,
Rob Chomentowski
Sr. Loan Officer (and FHA, VA, conventional, Homepath specialist)
858-922-7899
homeloan8@gmail.com