Cal-Vet Lending is the low cost home loan provider for first time home buyers in California. It is our experience in a wide array of loan services and our solid reputation that has allowed us a very high success rate in getting approval for our candidates. We make it easier and faster for our candidates to get a loan through our streamlined process, focused on your convenience. We help you understand the loan process and keep you up-to-date on the advantages of each loan option available on the market. So when you are thinking about buying a new home, consider doing it the simple and affordable way. The Cal-Vet Lending way. We look forward to helping you get just the right low home loan that best fits your needs!
California Department of Veterans Affairs Home Loans are for military personnel who are currently residing in or buying a home in California. It is arguably the best mortgage available on the market today in terms of value, payment, and qualifying. It offers very competitive, below-market interest rates and allows you to get your home with as little as $0 down payment. Apply today by visiting our Apply Online page.
The VA loan is a loan for current and former military personnel. Its benefits include $0 down payment, very low fixed interest rates. It is also very easy to qualify, compared to other loans on the market. Apply today by visiting our Apply Online page.
You can start right here by filling out our Cal-Vet Lending free online application. Or pick up the phone and call us at toll-free 1-800-757-1076. Our courteous loan professionals are here to answer your questions, explain how it works, and get you the low cost loan that best suits your needs. Read more about getting pre-qualified and pre-approved, and the steps you can take to get organized to make your home loan process even faster.
Please prepare copies of the following documentation for review during the loan application process to help make your loan process even faster:
Pre-qualification and pre-approval are steps you can take to improve your chances of not only getting the right loan but also getting the house you're after. Both terms are used to describe different levels of verification for the loan process, where pre-approval is a step higher than pre-qualification and pre-qualification is better than no loan qualifications at all. To be pre-qualified, you discuss your financial situation with your mortgage lender and send copies of documents pertaining to your income, assets, liabilities, equity, and credit report. When you are pre-qualified you are provided with a letter from your mortgage lender that states their opinion as to how much you can afford to pay to purchase your property. While it is likely that you may be approved for the loan, pre-qualification is not a commitment to lend. To be pre-approved, you must complete loan application documents and are then provided with a pre-approval certificate upon verification.
Getting pre-approved is very important and is highly recommended because you can negotiate your purchase much more effectively when you're pre-approved and because it will be quicker to close. It is also smart to do before you even start the house hunt because it will save you time. Pre-approval will let you know the maximum affordable home value to help you limit your search.
After loan approval, the final step in the process is closing your loan. When you meet to sign the finalized loan document (in presence of a notary public), bring a cashier's check from your bank for your down payment, a photo ID (usually a driver's license or passport) and your Social Security card. When signing, double-check to make certain that the rate and terms of the loan documents are as they were promised. Your loan will close shortly after signing. For home equity loans and refinancing specifically (not for home purchase loans), by law yor have a three day review period after signing prior to final closing.
The A.P.R. is the annual percentage rate. Different from the note rate, A.P.R. is interest as a percentage of the loan amount calculated on a yearly basis and including the loan origination fees along with the base interest rate in order to more accurately measure the true cost of the loan and make it more difficult for lenders to advertise low rates with hidden fees. For this reason, A.P.R. is a key determinant in comparing the value of loan programs, but should not be the only factor considered. In fact, it is important to note that A.P.R. can be calculated using different methods among different lenders, and is a complex calculation by itself.
A.P.R. generally includes fees such as points (discount and origination) prepaid interest, loan processing, underwriting, document preparation and private mortgage insurance (PMI) fees. Some lenders will include loan application fees or credit life insurance fees within the A.P.R. as well. Possible additional fees that are NOT included in the A.P.R. are title/abstract, escrow, attorney, notary, document preparation closing agent fee, home inspections, recording, tax transfers, credit reports, and appraisals. Keep these fees in mind when determining the total cost of your loan or refinancing transactions.
One point is the equivalent of 1% of your loan. The base interest rate on your loan is the percentage of the principal loan amount, (not to be confused with A.P.R.) and determines the monthly payment on the loan, an amount which is not tax deductible. Points are prepaid interest and may often be tax deductible. The relationship between points and rates is that the more points you pay, the lower your interest rate.
With zero-point/zero-fee loans, you can refinance without points or fees such as appraisal, escrow, or title fees, while your loan balance stays the same. And you can refinance using your zero-point/zero-fee adjustable loan multiple times a year. This operates on a rebate (or "yield-spread" or "service-release premium") pricing basis where you essentially pay the closing costs with a higher rate for cash up front. However, these loans eliminate out-of-pocket up front costs and allow you to refinance for future any small future rate drops. But the disadvantage of is that the rate you pay will be higher than it would be with the points and closing costs, which could cost you more money if you keep the loan too long. It depends on the refinancing rates drops in between. Also, make sure that the lender pays for closing costs from rebate points and not from an increase in loan amount. As a rule of thumb, zero-point/zero-fee loans are generally a good idea if rates are predicted to fall and if you plan to sell in less than 5 years.
Closing costs include lender fees, such as appraisal, credit report, points, processing, document preparation, underwriting, and tax service fees; settlement fees, such as title insurance, escrow, settlement taxes, messenger fees and recordation; and prepaid expenses like interim interest, homeowner's insurance, and real estate taxes.
Equity is a term used to describe how much saleable value of your home property that you actually own. It is the market value less the amount of the debt you still owe on the property. When you can borrow against the equity in your home it is called a home equity loan. The interest paid on home equity loans can often be tax deductible.
A FICO score (developed by Fair Isaac & Co.) is a credit score that describes the probability of credit bill payment based on credit history and a macro-level formula estimating credit behavior. There are actually three credit scores, one type from each of the three credit bureaus (Experian, Trans Union and Equifax) and some lenders use one or the other while other lenders use the middle score.
Your credit score takes into account how long you have had your credit, the number, amount and recency of your late payments, the credit used compared to the credit available, how long you've worked where you work and lived where you live, and of course, bankruptcy. You can increase your score by paying your bills on time, refraining from frequent credit applications and inquiries, and having a good amount-maxing out your credit has a very negative impact on your score.
A rate lock is when your lender places a hold on a certain interest rate and number of points for your loan for an agreed on amount of time. Typically, the longer the length of the lock, the higher the points or the interest rate due to the increase risk for the lender offering the lock. At the end of your lock, the lender must disburse funds or your rate lock expires. Some lenders offer free float-downs which allow you to get the lower rate if rates drop while your initial rate has been locked. Keep in mind, though, that you may pay for this option indirectly as part of the initial rate. Lock-and-shop programs let you lock in a rate before finding a home, an especially effective alternative when rates are rising.
PMI, or private mortgage insurance is used to protect lenders against the risk of foreclosure and it enables lenders to offer loans with lower down payments. Usually, the less your down payment is, the more your PMI is.
An equity loan is closed, where you get all your money up front and you make fixed payments back. Whereas an equity line is open, where you get different advances in the amounts you want, the funds being accessible via your checking account credit card.
Use this as a rule of thumb when determining how many points to pay on your loan, taking into account the length of time you plan on staying in your home:
When deciding whether or not to pay points, don't forget to factor in the tax benefits of deductible points. By the same token, lower payments mean less of a tax deduction as well. When considering deductible points for home purchase loans, the savings from tax deductions will reduce the break-even time. But for refinancing, the points are not tax-deductible, but instead are amortized over the loan term, resulting in little or no effect on the break even time.
A fixed-rate loan has an interest rate that stays the same, whereas the interest rate for an adjustable (or "variable") rate mortgage fluctuates up and down throughout the loan period. ARM loans fluctuate according to a rate index. While the difference between the two types is simple, deciding which type to choose takes some consideration. Keep in mind that when and if you refinance you may be able to convert your loan from one rate type to the other.
In general, the goal of refinancing is to save money on your loan by changing the terms. There are several ways to save by refinancing. However, if you have a loan without conversion options and with a balloon payment you may find yourself in a situation where you will be forced to refinance, most advantageously done a few months before the balloon payment is due. A general rule of thumb is to refinance only when you can save 2% or more, but this is only a rule of thumb. It is better to judge whether you should refinance by performing a break-even analysis.
The typical reasons to refinance are as follows:
A break-even analysis calculates the amount of time it would take to recover the cost of your loan or refinancing transaction from the resulting monthly savings. It is calculated using the following basic formula:
Total Cost ? Amount of Monthly Savings = Number of Months to Break EvenGet pre-approved. Don't bother making offers on a home without being pre-approved for a sufficient loan first.
Get it in writing. Don't rely on verbal agreements, between you and the seller or the lender. Bring documents with you to check against. Have a professional inspector verify that requested repairs have been conducted.
Be aware of the time involved for each step of the loan process. Start shopping for home insurance as soon as you have an accepted offer. Allow for Murphy's law. Allow for delays in the transaction. Get your documentation filled out and in as soon as you can. More time will allow you to more clearly consider your alternatives.
Find out the right value of your home from the right sources. If you suspect that your home value is low, do not waste money paying for a full appraisal, but ask for a complimentary list of comparable sales in the area. Also keep in mind that mortgage companies don't use the county tax-assessor's value to determine your loan amount.
Always review loan documents before signing them. If you can, review the documents you will be signing in advance. With this familiarity, you will be more likely to catch red flags and ask the right questions beforehand.
When refinancing your first mortgage, check with your lender first when it comes to pulling cash out of your credit line, getting a home equity line, or getting a second mortgage before the refinance. Doing these things may result in the refinance deal to be broken. It may help to remember that there are programs that allow you to apply for a first and second mortgage at the same time.
Never assume. Ask. Your Cal-Vet Lending loan specialist is here to help you. For example, don't assume that your loan does not have a prepayment penalty clause. This could cost you if you're selling or refinancing in the next 3-5 years. Don't assume that the equity line will not reach its life-cap-many have highest potential life-caps at 18% that you should be prepared to pay. Don't assume that your home equity loan is fully tax-deductible; in some cases it's not. Don't assume you should get as large a credit line as you want. Too large a credit line can be detrimental to how lenders calculate your payments. And don't assume that a home equity loan is always cheaper than a car loan or credit card. A credit card can be cheaper than a credit line.
