Financing Property in Mendonoma

Mendonoma is known for its distinctive and breath taking coastline, majestic Redwood forests and diverse small-town communities.

People buy property in Mendonoma for a number of  purposes:

Primary Residence: the property you live in most of the time, that is close to where you work
Second Home: the property you live in some of the time that is not close to your workplace
Investment Property: the property you may live in some of the time, but also rent out

Loan products and down payment requirements differ quite a bit for these three options. Because of today’s low fixed rate environment, most consumers select traditional 30-year or 15-year fixed rate financing, but adjustable rate options (these usually involve a period of fixed rate followed by a rate adjustment) are sometimes used by people who have a shorter term ownership horizon. Here’s a summary of the products available:

Primary Residence

Fannie Mae/Conforming Loan Programs: Allow a down payment of as little as 3% for loan amounts up to $417,000 for a one unit property.

Fannie Mae/Conforming “high balance” Loan Programs: Allow a down payment of as little as 10% for loan amounts up to $520,950 in Sonoma County.

FHA Loan Program: Allow a down payment of as little as 3.5% for loan amounts up to $512,500 in Mendocino County and $662,500 in Sonoma County.

VA Loan Program: Allows 100% financing for loan amounts up to $417,000 in Mendocino County and $448,750 in Sonoma County for qualified veterans of the US armed forces.

USDA Loan Program: Allows 100% financing for loan amounts up to $417,000 for persons buying homes in designated rural areas (most of Mendocino and Sonoma counties qualify). Income limits apply.

Jumbo Loan Programs: For persons who wish to borrow more than the loan amounts referenced above, jumbo loan programs are available that allow financing up to 80% of home price for loan amounts up to $1.5 million. Higher down payments are required for loan amounts over $1.5 million.

FHA Insured Reverse Mortgages: For persons 62 years of age or older who wish to eliminate their mortgage payment and/or receive monthly income from their home equity. An increasingly popular way to purchase a home and preserve liquid assets.

Second Home

Fannie Mae/Conforming Loan Programs: Allow a down payment of as little as 10% conforming loan amounts.

Fannie Mae/Conforming “high balance” Loan Programs: Require a down payment of 20% for loan amounts reference above.

Jumbo Loan Programs: Minimum down payment is 20%. Traditional fixed rate loans plus adjustable and interest only loan programs available.

Investment Property

Fannie Mae/Conforming Loan Programs: Allow 85% financing of single family homes. 25% down required for 2-4 unit properties. Call for 2-4 unit loan amounts, as they vary by county and number of units.

Fannie Mae/Conforming “high balance” Loan Programs: 20% down required for single family homes; 25% down for 2-4 unit properties. Loan amount limit as referenced above.

Jumbo Loan Programs:  30% down required for adjustable rate amortizing/interest only loan products. 50% down required for fixed rate loan products.

Refinancing After an All-Cash Purchase

To be a more competitive buyer, it is not unusual for purchasers to pay all cash. This allows for a faster closing period and, in the seller’s mind, less chance of problems that will derail the sale. Many times the property can purchased for a lower price when all cash is offered. Buyers paying all cash frequently want to recoup some of their investment right away for other uses. This is possible using most of the products reference above, but the amount borrowed relative to property purchase price and the loan interest rate are frequently not as attractive as they would be if the financing had placed at time of purchase.

Property Appraisals in Mendonoma       

Mendonoma has a wide variety of housing. The keys to an appraisal are as follows:

Comparison of property being financed to similar properties recently sold: This can be challenging if few properties have sold that are similar in location and quality to the property being financed. If you are purchasing a home using the services of a real estate agent, we work with your agent and the appraisal company to ensure that the best possible data is used in your property appraisal.

Condition of property being financed: Any obvious health, safety or structural deficiencies that are identified by the property appraiser must be corrected prior to closing. On a case-by-case basis funds can be credited at closing to an escrow account for completion of work after closing. The appraiser is not privy to the contents of any home inspection or termite reports that are obtained unless these are voluntarily supplied by the home purchaser/owner or real estate agents.

Loan Prequalification and Preapproval

Home purchasers are more competitive and confident if their financing is fully approved prior to making an offer on a property. This involves our review of the client’s credit history, income profile and available financial assets, working with the client to correct any credit history defects that will either prevent loan approval or cause loan pricing to be adversely affected, and sometimes suggesting adding cosigners to the loan application to improve its strength.

This service is free and completely confidential. We also offer evaluation of refinance prospects for those homeowners who wish to take advantage of today’s low interest rates but are concerned about their ability to qualify.

Holmgren and Associates

DBA of Finance of America
1900 Mountain Boulevard
Oakland, California 94611
Phone: 510-339-2121
NMLS 0910184/1071

Holmgren & Associates is a branch of Finance of America. We are a full service mortgage banker with an experienced staff offering expertise in residential mortgage lending, with primary focus on loans for home purchase, refinance, and reverse mortgages.

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