California FHA Loan

Now California home buyers can take advantage of the fact that California FHA loans are available for them to purchase a new home anywhere in the state as well as refinance their existing home.

California FHA home loan allows you as a first time home buyer, or any qualified California home buyer, to purchase a home with only a 3% down payment. If you already have an FHA Loan and want to improve your terms, you can use a low cost streamline refinance with your existing home. Need cash? The FHA loan program will do a cash out refinance for up to 85% of the existing value of your home.

Purchasing a new home is always an exciting affair as you have probably waited for this opportunity for a long time. Finding the right home requires a great deal of research and is followed by the making the right mortgage decision. Just like you would want to find the right home for your family, similarly it is as important to find the right type of mortgage. This is where 1st Continental Mortgage can help you by offering an FHA loan that will suit your requirements and take care of your interests.

The FHA loan program has been devised to support people who have long wanted to own homes but have not been able to do so due to the stringent and difficult requirements for other types of loans. Now you can also take advantage of the California FHA loans while buying a home.

Having a California FHA mortgage is an attractive option to most first-time home buyers because the down payment requirements for this loan can be as low as 3% and you can use any number of Down Payment Assistance programs and options to help you meet this requirement. The good part is that you don't have to be a first-time home buyer to get a California FHA mortgage; you can also have a California FHA loan on an existing home.

The FHA, or the Federal Housing Administration, was established by the government in 1934 to improve the existing housing standards and conditions of the American people. Before 1934, the down payment was up to 50% but after the implementation of the FHA program, the down payment needs of the typical borrower were considerably reduced and is now affordable for almost everyone.

How The California FHA works

In reality, FHA will not lend the money to you; instead you will be able to borrow through a California mortgage company like 1st Continental Mortgage FHA's job is to insure that the mortgage lender is paid back if you default on the loan and as a result it provides security for the mortgage lender to take the risk associated with lending to borrowers outside of traditional conventional loan guidelines.

The FHA mortgage program in California is much more flexible than any other conventional mortgage program especially when it comes to dealing with past credit history issues. The California FHA lending program will include even a bankruptcy that was discharged only after two years with no rate penalties for higher risk. This may not qualify you for any other loan but you will definitely not face any problems in acquiring a CA FHA loan if you meet all the other traditional requirements.

Typically, to get a California FHA mortgage, most borrowers aren't required to have a down payment of more than 3 to 5%, with the norm being 3%. California borrowers can elect to pay points associated with CA FHA mortgage rates, with each point representing 1% of the total mortgage value. The points are paid to the California lenders, which further help them to lower the interest rate of the mortgage, just like with a traditional California mortgage.

As a borrower, you will be required to pay MIP, or mortgage insurance premiums, on the FHA mortgage. The MIP you pay insures California lenders like 1st Continental Mortgage against default. This protection says that the total amount of the mortgage will be paid to the lender in case you default on the loan. Contrary to popular myth, the California closing costs on a FHA loan are typically no different than the total cost you would pay for a traditional mortgage. On of the major benefits when buying a California home, the home seller can pay up to 6% of your closing costs, meaning most home buyers with a good real estate agent to negotiate, don't have to worry about closing costs, or financing them. They simply let the seller pay them.

Qualifying for a CA FHA home loan is much easier as compared to a conventional loan as lenders make decisions based upon credit quality rather than credit scores.