VA Loan Limits for Orange County increased in 2014

January 1, 2014 by

orange county va loan limits 2014The VA loan limits in Orange County for 2014 will be $687,500. The Veterans Administration recently announced the 2014 VA loan limits and many counties in California saw an increase due to the improved real estate market and higher home prices in 2013. While most of the country, including many counties in California, will continue to have their limit set at the Conforming limit of $417,000, “higher priced” counties have higher VA loan limits.

What Makes Orange County “High Priced”?

The obvious answer to the question of why Orange County qualifies for high loan limits than most of the country is because of the high average cost of a home compared to other areas. While the Median home price in Orange county is above $500,000, most of the country’s median price is under $400,000. Other counties surrounding Orange County also have higher limits, including Los Angeles ($687,500) and San Diego ($546,250).  It is important to note that this limit is for 100% financing. It is still possible to get a VA loan that is above the 100% limit.

Jumbo VA Loan in Orange County

When a loan amount is above the 100% limit it is commonly known as a Jumbo VA loan. Since the VA loan limit in Orange County for 100% financing is $687,500, then an VA loan above that amount is considered to be a “Jumbo VA Loan“. If a Veteran is purchasing (or refinancing) a home in with a sales price (appraised value) above $668,750 and they intend to get maximum financing, then they will need a down payment equal to 25% of the difference between the 100% loan limit of the purchase price. For example, if a Veteran is buying a home in Irvine, CA for $787,500, or $100,000 above the VA loan limit, then the Veteran would need a down payment of $25,000. Only $25,000, or 3.17% down payment. There is no better loan program than VA when it comes to low down payment and competitive fixed interest rates.

The first step in determining whether a VA loan is right for you is to contact a local Orange County VA loan specialist. The VA loan officer should be able to prepare custom VA loan scenarios after a quick phone conversation. The scenarios will give a detailed breakdown of the purchase price, loan amount, and costs involved in the home buying process. Also, your Orange County VA loan specialist should also be able to provide a video explanation of the scenarios, which will help to understand the scenarios as well as share them with other family members or financial advisors.

Authored by Tim Storm, a California Mortgage Loan Officer MLO 223456 – Please contact my office at the Emery Financial. Direct line at 949-640-3102. www.OrangeCountyVALoans.com

Filed Under: VA Mortgage Tagged With:

What FICO Score is Required for a VA Loan?

October 29, 2013 by

A common question by Orange County veterans interested in using VA financing to purchase or refinance a home is “what is the minimum FICO required?” The answer to this question can vary from lender to lender. Many lenders require a minimum of 620. But there are lenders who will allow FICO scores as low as 580 or lower.

Minimum FICO Scoring Tied to Loan Amount and Purposerefinance to va loan

VA lenders may  adjust the minimum FICO score depending on the loan amount and purpose of the loan. For example, many lenders will allow a minimum FICO of 620 only when it is a purchase loan and the loan amount is $453,100 or less. A loan amount greater than $453,100, which is considered a “high balance” is common in Orange County, may require a minimum FICO of 640. A refinance may have a different set of requirements. A refinance of a Conventional loan to a VA loan where the loan amount is less than $453,100 may require a FICO score of at least 640, while VA loans greater than $453,100 require a minimum FICO of 660. The VA loan limit for 100% financing in Orange County in 2018 is $679,650. Loan amounts above $679,650 are possible but would require some equity or down payment. A VA loan above the county limits for 100% financing is considered a “Jumbo VA Loan.”

Other VA Loan Credit Requirements

Overall, VA is one of the most flexible loan programs when it comes to credit. A Veteran can get a $0 down VA loan in Orange County only two years after a bankruptcy or foreclosure. Most loan programs require at least 4 fours seasoning after a foreclosure, if not closer to 7 years. And more down payment. But with VA, the 2 year requirement makes it a very flexible program. There is no seasoning requirement for a short sale.

How is the FICO Score Determined

FICO, which is the acronym for Fair Isaac Company, is a program which is used by the credit bureaus to determine a borrowers creditworthiness. There are different versions of FICO depending on what a person is financing. The FICO score shown on a credit report at a car dealership will be different than the FICO score pulled by a lender. There are different factors that a home lender deems to be important versus what a car lender will think is important. Also, there are other types of scores that are readily available to consumers, including the Vantage Score. However, the only way to get your actual FICO score that a mortgage lender will see if to go to a mortgage lender.

Get PreApproved for a VA Loan

One of the biggest reasons why it is so important to get PreApproved for a VA loan prior to searching for a home is because of the credit report. Even the best borrowers can sometimes have a surprise on their credit report. Finding this out and clearing any credit report errors prior to finding the home of your dreams is important if the closing is to be a smooth transaction. This is why the first step for a Veteran in Orange County who is thinking of using VA financing to buy a home should always be to call a local Orange County VA lender.

Authored by Tim Storm, a California Mortgage Loan Officer MLO 223456 – Please contact my office at the Home Point Financial (NMLS 7706). Direct line at 949-640-3102. www.OrangeCountyVALoans.com

Filed Under: VA Mortgage, VA Purchase Loans Tagged With: , , ,

VA Refinancing Options For Eligible Orange County, CA Homeowners

July 9, 2013 by

Orange County VA Loan ApprovalVA mortgage loans allow eligible Orange County Veterans to refinance their home to take advantage of lower interest rates that can ultimately save you sizable sums of money in both the long-run and the short-run by lowering your monthly payment. What many don’t realize is that the current loan does not need to be a VA loan.

Many Orange County home owners are finding that if they currently have a Conventional loan, they can refinance into a VA loan if you are an eligible veteran or member of the armed services. Transferring from a Conventional mortgage to a VA mortgage is known as a “Conventional to VA Refinance Loan” and is a very straightforward process. Technically, VA considers a refinance from a non-VA loan into a VA loan to be “cash out”, even if the borrower is not getting cash back. And while many lenders will only allow a Conventional to VA refinance up to 90% of the properties value, there are lenders who closely follow VA guidelines and allow for 100% loan to value financing. In Orange County, where the VA 100% financing limit in 2013 is $668,750, this opens a lot of possibilities. And don’t forget, many lenders will finance up to a $1,500,000 VA loan. Some equity is required when the loan is greater than the 100% limit, but not as much as would be required for a “Jumbo” Conventional loan.

The “Conventional to VA Refinance Loan” process is described in detail in our article Can I Qualify For A VA Refinance If I Currently Have A Conventional Loan?

A common question related to VA refinancing is whether or not you combine a Conventional 1st mortgage with an equity line or fixed rate second mortgage. The answer is…you can! Even if the 2nd is greater than 100% of the properties value it is still possible to combine a portion of the equity line with the first mortgage and “subordinate” the remaining 2nd mortgage. There are loan to value restrictions in this scenario, typically capping out at 115% of the properties value.

VA IRRRL for Orange County Homeowners

Of course, you are also allowed to refinance your home if you currently have a VA mortgage. An Interest Rate Reduction Refinance Loan (IRRRL) is also known as a VA Streamline Refinance.  This is a fast and easy way to lower your monthly mortgage payment and interest rate! And typically with the lender using a “lender credit” to cover some or all of the closing costs.

Some of the benefits of a VA Streamline Refinance or IRRRL include:

  • In most cases you will not need to have an appraisal prepared. This saves time and cost.
  • No income verification. Remember when you purchased your home and had to provide two years income documentation, paystubs, first born and a pint of blood.( Just kidding.)  The IRRRL program is “streamlined”, meaning its a very easy process. The lender will verify you have a job, but does not ask for income documentation. As a matter of fact, the income section of the loan application is left blank.
  • An extremely low VA Funding Fee – only 0.5%. And in many cases the lender can provide a loan scenario where even the VA Funding Fee is covered with the “lender credit.”

Consult with an Orange County, CA VA Loan Specialist

It is important to make sure to talk with a VA loan specialist. VA financing tends to be specialized.  The guidelines for VA financing are much different than for Conventional loans, and consulting with a loan officer who is not familiar with VA financing may result in answers that are not correct. So make sure you are getting the correct answers to your questions when it comes to VA financing.

Filed Under: VA Cash out Refinance, VA Mortgage, VA Refinance Loans Tagged With: , ,

Orange County VA Loan Limits Increase through end of 2012

August 19, 2012 by 1 Comment

Orange County VA loan limits 2012The VA loan limits in Orange County, CA were already at a high level in 2012. Effective August 6, 2012, the VA loan limits for 100% financing in Orange County has been increased from $621,000 to $675,000. The Honoring America’s Veterans and Caring for Camp Lejeune Families ACT of 2012 brought several changes to the Veterans Guaranty loan program. The biggest change is that the calculation for each counties zero down limit has been reverted back to the old version (pre-2012). The new loan limits applies to all VA loans closed from August 6, 2012 through December 31, 2012.

$675,000 with No Down Payment in Orange County, CA

$675,000 buys a nice home in Orange County. This limit also applies to Los Angeles County. The property can be a single family home or a condo. If it is a condo then the condo project needs to be on the VA Approved Condo list. It is also possible to use VA financing to purchase a 2, 3, or 4 unit property as long as at least one of the units will be occupied by the Veteran.

How about a $1,000,000 Jumbo VA loan?

Technically, VA does not have a “limit”. There is a limit for 100% financing, but it is possible to purchase a home for more than the 100% financing limit by coming in with a small down payment. A down payment equal to 25% of the difference between the 100% financing limit and the purchase price is required. For example, if Johnny Johnson wants to buy a home in Irvine with VA financing for a price of $775,000, then a down payment of $25,000 is required. The base VA loan would be $750,000. ($775,000 price less $675,000 limit = $100,000. 25% of $100,000 is $25,000, which is the down payment.) That end up being 3.23% down payment on a $775,000 purchase price. With no mortgage insurance and a low fixed rate. There is no other type of financing that can touch a VA loan.

Refinance to VA loan at $675,000 with No Equity in Orange County

This new loan limit is not just for purchasing a home. It also works for a refinance. For a Veteran who bought their home several years ago and put 20% down, but now has no equity, this can be a great solution. Especially since the Conforming loan limit in Orange County is $625,500. Not only does a Conventional loan require 20% equity for a refinance (unless you are able to get Private Mortgage Insurance which is an added expense and is expensive), but VA interest rates are most likely lower than a high balance Conforming loan. And almost certainly lower than a Jumbo 30 year fixed on a Conventional loan.

The first step in determining whether a VA loan is right for you is to contact a local Orange County VA loan specialist. Your VA loan officer should be able to prepare custom loan scenarios after a quick conversation over the phone. The loan scenarios should give you a very clear and concise break down of the numbers involved in purchase or refinance to a VA loan. Even better, your loan officer should be able to prepare a custom “screen capture” video which will walk you through loan scenarios, answering questions you may have.

Filed Under: VA Mortgage, VA Refinance Loans Tagged With: , , , ,

Impound/Escrow Accounts are Required on VA Loans for Orange County Veterans

June 17, 2012 by Leave a Comment

An impound account, also known as an escrow account, is required on VA loans for the life of the loan. The purpose of the impound account is to make sure the Veteran stays current on the property taxes and home owners insurance. The last thing anyone wants is a property tax lien, which could take precedent over a VA mortgage. Most lenders in California require an impound account on any type of loan when there is less than a 10% down payment. The FHA loan program, which is another government loan program available to anyone and only requires a 3.5% down payment also requires an impound account for the life of the loan.

Is the Impound Account Interest Bearing?

In most states the Escrow Account is not interest bearing, meaning the Veteran does not earn interest on the money being held in the account on their behalf. However, in Orange County and in California it is now law that escrow accounts earn interest which is paid out to the homeowner. However, don’t expect to make a killing. The amount of interest earned will be minimal.

The Impound Account Helps VA Homeowners Budget Their Cashflow

This “forced savings” account is meant to help the Orange County Veteran budget their finances. It is not uncommon for homeowners to not budget for the semi annual tax bills or annual homeowners insurance payments. Property taxes in Orange County, CA are due on November 1 and then again on February 1. Tax payments that are not made prior to the grace periods of December 10 and April 10 become delinquent, which carries penalty fees. Also, it could turn into a tax lien. Having an escrow account prevents all this.

For homebuyers and homeowners who are interested in learning more about VA financing and all the benefits the program offers, contacting a local Orange County VA loan officer is the first step.

Authored by Tim Storm, an Orange County, CA  VA Loan Officer – Please contact my office at Emery Financial for more information about an Orange County, CA home loan. 949-640-3102

www.OCFHALoans.com

Contact us for your Orange County VA Mortgage:

tstorm (at) ochomebuyerloans.com

 

 

Filed Under: VA Mortgage
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