California has always been a great place to live with it's comfortable weather and rich history. Whether you are looking to refinance or purchase your home with a California mortgage, there are definitely some things you must be aware of before you submit an application to a mortgage broker or lender.

First-time Home Buyers

The California Housing Finance Agency (CalHFA) launched the Community Stabilization Home Loan Program in July 2008 and should bring very favorable terms for families and individuals who are looking to purchase their first homes. Fannie Mae also announced that they will be significantly supporting this ground breaking program that will allow first-time home buyers help some of the most devastated areas of California that were affected by large amounts of foreclosures.

Fannie Mae announced that they will be contributing to the Community Stabilization Home Loan Program in these three ways:

1. Offering first-time buyers below-market interest rates which will allow much more liquidity


2. Low down payment requirements in a special arrangement with the California Housing Finance Agency


3. Fannie Mae will also open up their inventory of foreclosed homes in areas that CalHFA identifies as having the largest need for this program

This is a very favorable partnership for California families to move into their first-home.

California Refinance Loans;
If you are in need of refinancing your California mortgage, you will still need to pursue your loan with care and caution as always. Before applying for your loan, always educate yourself on the latest loan opportunities and any local policies in place that will affect your mortgage. You can do this by visiting the California Department of Real Estate website or call them on the telephone. They have a wealth of resources to help you.

Be prepared to document all of you income, employment, and asset claims as accurately as possible if you want to get the lowest possible interest rate. Limited or low documentation loans are often .5% or higher. In the past, it was simple to obtain these loans with average credit, however many brokers and lenders now require 'good' to 'excellent' credit profiles in order to qualify for these loans. This type of California mortgage should never be abused and is best suited for those who are self-employed or are paid in large amounts of cash in their line of work.

It's also always a good idea to have all of your documents ready before you begin your application. Interest rates often change daily, and sometimes multiple times a day due to economic factors. Many lenders will not 'lock' your rate until you have a very complete mortgage file in place. This means to have your most recent pay stubs, W-2 forms, and bank statements ready to send to your desired mortgage company as soon as you decide to do business with them. This allows your loan officer to move very quickly to secure the best rate for you.

Whether you are looking to buy or refinance your home in California, it's always best to be as thoroughly educated as you can before submitting any paperwork to a mortgage company. First-time home buyers are now empowered by new, creative policies backed by Fannie Mae and for those looking to refinance - being educated and prepared can often save you time and lots of money by having all you 'ducks in a row'.

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