Monday, February 23, 2009

Anaheim, CA Real Estate – Buying A Home With FHA Financing.

Anaheim home buyers, especially those with minimum downpayments are finding FHA loans to be very desirable for financing real estate in Anaheim. An FHA loan gives home buyers the option of putting down a very small amount of money, some FHA loans require as little as three percent down payment. Here is some valuable FHA loan information that prospective buyers can use while looking at homes for sale in Anaheim, CA.

FHA History

The popularity of FHA loans in Anaheim, California is on the rise. Although the institution has been around since 1934, it may have never been as popular as it is now. The Department of Housing & Urban Development (HUD) absorbed the Federal Housing Administration (FHA) under its umbrella in 1965. Previously the lack of FHA loan popularity in California was due to rising home prices and very low loan limits set by the agency. Also, the FHA appraisal guidelines were very stringent and caused frustration among both buyers and sellers in Anaheim, CA. Fortunately, both of these issues have been greatly improved.

The FHA insures loans that are made by approved lenders. They do not make loans, but only insure loans made by approved lenders who service or sell the loans on the secondary mortgage market. As long as FHA guidelines are used in funding the loan, the FHA, upon default by the borrower, insures the lender against loss. If the borrower does default, the lender may foreclose and will receive cash up to the established limit of the insurance. The lender is protected, in the case of foreclosure, by charging the borrower a fee for an insurance policy called Mutual Mortgage Insurance (MMI). The premium is paid either as a cash cost at closing or it is added to the mortgage amount. The later being the most common preference.

FHA Mortgage Limits on Real Estate in Anaheim

The FHA periodically changes its mortgage limits and as of January 14, 2009, the maximum mortgage limit in high-cost areas is 115% of the local median price, but not to exceed a maximum of $625,500. In many parts of the country the upper limit is $417,000 for a single family home and can even be lower for some depressed areas. Orange County homes, including those in Anaheim are now at the upper limit of $625,000.

Anaheim Home Buyers with Blemished Credit History

If you are looking at homes for sale in Anaheim and your credit is less than perfect, FHA might just be the loan for you. You may qualify for a FHA loan even if you have had financial problems.

1) FICO scores can be lower than those for a conventional loan.
2) Bankruptcy - You might obtain an FHA loan two to three years from the date of your bankruptcy discharge, as long as you have maintained a good credit since your debts were discharged.
3) Foreclosure - If you keep your credit in excellent shape since a foreclosure, an FHA loan may be available to you two to three years from the final date of your foreclosure.

Competitive Rates and Terms

Today’s rates and terms are very straightforward and very competitive.

1) The lenders have very little adjustments to the FHA loan rates, with the rates usually within .125 % of conventional loans.
2) Mortgage insurance is funded into the loan with just a very small premium added to the monthly payment, usually less than other private mortgage insurance.
3) As of January 1, 2009 buyers can get by with as small as 3.5% down payment. The FHA even allows downpayment money in the form of gifts from others.
4) Allowable debt ratios are higher with FHA than with the limits imposed by conventional loans. This simply means they are not as picky if you already have other debt from student loans, cars, credit cards, etc.

Fewer Required Repairs than the FHA of Yesterday

At one point, FHA repair demands were so excessive that the sellers would discount the selling price if the buyers would agree to obtain conventional loans instead of FHA. Today the requirements are much more reasonable.

1) Defective roofs that leak must still be replaced but an older roof that does not leak does not need to be replaced.
2) Windows that stick when opening or windows with cracks in the glass do not need to be repaired.

Home buyers in Anaheim should be advised that FHA appraisals never take the place of a professional home inspection. Buyers should still obtain a professional home inspection before a purchase is closed. FHA still does require some repairs to be done that a non FHA loan would not ask for. Some may consider these repairs to be “ticky tack” but they are mandatory nonetheless. This can often present a problem when the property in question is being sold “as is” such as often case with bank owned real estate.

After reading this information on FHA loans, Anaheim home buyers should have a better understanding of another type of loan available to them. An FHA loan can be extremely helpful if you are only able to make a minimum down payment and can be a valuable tool for buyers to have at their disposal. There are many important aspects to remember about FHA loans, so be sure to contact a reputable agent or loan officer with further questions about loans or real estate in Anaheim.

Tuesday, February 17, 2009

4 Places Your L.A and Orange County Twenty Something Wants to Live But Probably Shouldn't

Today’s Millennial Generation is known by mainstream America to be all about one thing...themselves. Many news sources have deemed the millennial "spoiled" and "wanting of everything, right now, without sacrifice."

We'll be the first to recognize that many of the millennial are hard working and an asset to American society. However, instead of chastising an entire generation, we'd like to encourage those who think they already deserve the corner office, sushi lunches, bottle service, and weekly massage therapy to rethink their current value set. We want them to think for the long term, become financially secure enough to afford the lifestyle they want, learn the value of patience and deferred gratification, and learn how their real estate decisions now will impact their plans for the future. Here are some of the top four places Los Angeles and Orange County twenty-somethings want to live in but probably shouldn't.

1.) Newport Beach, Balboa Peninsula

Sorry guys, but living Newport Beach as a twenty-something may be tougher than you think. If you have an average income and any aspiration of financial independence, renting in Newport is about as difficult a place to make that happen as you can get. Besides a premium for rent, there are a lot of other entertainment venues that are also sure to stab a hole in ones's wallet. There's Fashion Island (for the fashionistas!), Balboa Peninsula, and endless lists of different bars and clubs at night.

2.) Santa Monica

Santa Monica, CA is a very big city and has a hip nightlife which can get very pricey.
For a twenty-something not making that much money, it might not be such a great idea to have such close access to so much high-end entertaiment. The 3rd street promenade is a very popular destination to spend some serious money on fashion. Set in a beautiful seaside location, Santa Monica has a seemingly endless supply of things to do, the problem is most are not cheap.

3.) Hollywood Hills

Unless you're a star waiting to be wait, especially if you're a star waiting to be discovered, the Hollywood area is just too expensive for you. Hollywood is known for entertainment, and the name itself has connotations of glitter and glam, fame and fortune. Hollywood is a great place to visit, and it's a great place to live if you have money, but it's not a great choice for a twenty-something with an unclear career path. Again, there is just too many places to spend money and too few legitimate opportunites.

4.) Downtown Long Beach

The Shoreline Village, The Pike, Pine Street...Just to name a few good places for increasing your credit card debt. Unique shops and fine dining are abundant in these places and it is easy to keep doling out money without even noticing.

Why The Cost Of Living In These Areas Really Adds Up

Parking: Most of these destinations are in and around L.A., as such, most metropolitan Angelinos are already well versed in pay-to-park lifestyle, but those from out of area need to be brought up to speed. You may walk more or learn to multitask better, but most will have to add it up to another cost of living.

Eating Out: It's too early to go clubbing, so let's go shopping and eat out! With the millennial generation, an average shopping spree cost about $50 and an average price of lunch at an upscale restaurant is $20. Plus Tip!

Bar Hopping and Clubbing: Club cover charges range from $10-$30. Drinks usually $10 each. Taxi rides cost about $2.95 for the first quarter mile and has a $30 per hour wait time. Imagine going clubbing at least three times a week, drinking at least two drinks a night, and needing taxi rides every night. That really adds up.

Rent: For the most part, rent ranges from middle of the road to sky high. Now and then, there are some deals to be found on apartments that will be more comparable to other parts of the County. We know there are many who will say they'd rather pay just a little more to live in these pricey zip codes, especially when it knocks down their commute. What people often don't take into account is the temptaion of living in such a potentially expensive area may make it harder to make that rent payment than ever before.

As parents, millennial adults can be difficult to understand and frustrating to manage. Many parents are irritated that their children seem to want, and often demand, a better lifestyle than they have. Rather than be irritated, we'd love to help you educate your loved ones on the power of sound saving and investing, particularly with real estate. We'd like to help you show those closest to you that living in expensive places is not a right, but a reward for hard work, dedication, and some deferment of gratification. Lastly we'd like to help you provide a roadmap for your children, and maybe yourself, as to how this type of lifestyle can be achieved if they are willing to make some sacrifices.

In the end, it's not an easy road to walk but one that will last forever. Investing in the future instead of wasting time, energy, and money on expensive things will help open the millennial's eyes to the reality of what their priorities should be. We want them to see that instead of blowing all their money on "fun" things, they should be looking past the weekend and start planning for their next ten years. They are blessed in that they are coming into a market with low prices, low interest rates, and a seemingly endless supply of inventory but unless they start preparing today, they may just miss the real estate opportunity of a lifetime.