Mortgage Loan Archives - California Platinum Loans

Unlock the Power of Home Equity with a HECM Loan! Learn how this financial tool can help seniors live a more comfortable retirement.

A HECM loan is a “home equity conversion mortgage.” This is a government-insured mortgage that is only available for homeowners who are age 62 or older.

HECM loans are insured by the Federal Housing Administration (FHA). FHA-approved lenders only offer them.

HECM loans are reverse mortgages. They allow older homeowners to withdraw a portion of their home’s equity for living expenses or other needs.

How Are HECM Loans Different From Other Reverse Mortgages?

HECM loans are government-insured. Other reverse mortgages aren’t.

HECM loans also include protections for borrowers. They also have requirements for borrowers that other reverse mortgages don’t. Borrowers for HECM loans need to be:

62 years old or older
Own their property outright (or paid down a lot of equity)
Live in the home as a primary residence
Not have any federal debt (like unpaid income tax)
Be able to pay property tax

What Are Other Requirements For HECM Loans?

HECM loans need to meet all flood requirements and FHA property standards. Only single-family homes or 2-4 unit properties can qualify.

If you have a condo, it needs to qualify for HUD approval for the loan. Condo units also need to meet FHA single-unit approval standards. Some manufactured homes may also qualify for a HECM loan, as long as the home meets FHA standards.

How Does The HECM Loan Pay The Borrower?

As a reverse mortgage, the HECM loan pays income to the borrower. There are five options for how the funds from the loan can be paid or used:

Equal monthly payments: as long as one borrower is alive.
Term payments: equal monthly payments for a fixed term.
Line of credit: unscheduled payments, made on request of the borrower.
Modified tenure: a combination of equal monthly payments and a line of credit as long as one borrower is alive.
Modified term: A combination of equal monthly payments and a line of credit for a fixed term.

HECM mortgages can help older homeowners to stay in their homes and live comfortably. You need to complete a HUD-approved counseling course to receive the loan. If you are looking into reverse mortgages, contact California Platinum Loans to speak with their qualified, experienced staff. They can explain how this FHA-insured mortgage program works in detail.

Sources: U.S. Department of Housing & Urban Development, “How the HECM Program Works,” URL:

Interested in jumbo mortgages in Los Angeles? Check out our latest article answering six common questions about these big-ticket loans!

With median home prices at over $900,000 in Los Angeles County, jumbo mortgages can be required for many buyers to finance a home purchase.

What are jumbo mortgages?

A jumbo mortgage is any mortgage which is greater than the annual loan limits published by the Federal Housing Finance Agency (FHFA) each year. Jumbo mortgages are not underwritten by Fannie Mae or Freddie Mac, the two federally-chartered home loan organizations that insure or back “conforming” or conventional mortgages that are less than the FHFA’s annual loan limits.

How much can you borrow on a jumbo mortgage?

Jumbo mortgages start at $1,089,300 in Los Angeles County for a single family home. You can borrow $2 million, $3 million, or more for a jumbo mortgage, depending upon your qualifications and income.

What are jumbo loan requirements?

You may find some online resources which say you need a minimum credit score of 700 for a jumbo mortgage. Jumbo loan requirements can be different from conventional mortgages, usually because the loans aren’t government-backed, which increases lender risk.

Jumbo loans also require favorable debt-to-income ratios, usually no higher than 43%.

Do you need perfect credit for a jumbo mortgage?

You do not need “perfect” credit to qualify for a jumbo mortgage, but the better credit you have, the greater your choices of mortgage term and lender will be. Some lenders do require a minimum credit score of 700, but others are more flexible.

What are down payment requirements for Los Angeles jumbo loans?

You will need to have sufficient equity to qualify for a jumbo mortgage. In the past, many jumbo mortgages required a 30% down payment. This is no longer the case and you may find lenders with more flexible down payment terms ranging from 15% to 30%.

How do you qualify for a jumbo mortgage in Los Angeles?

The optimal way to qualify for a jumbo mortgage in Los Angeles County is to work with a qualified and experienced mortgage broker. They can guide you through the process of obtaining a jumbo mortgage to buy the property that you want and need. Work with California Platinum Loans to discover the many financing options that are available to you.

Sources:

St. Louis Federal Reserve [FRED], “Housing Inventory: Median Listing Price in Los Angeles County, CA”

Fannie Mae. “Originating & Underwriting: Loan Limits”

Navigate the Complex Mortgage Home Loan Process Like a Pro: Don’t Do it Alone! Business Owners, Entrepreneurs, and Self-Employed Individuals All Trust California Platinum Loans to Guide them Every Day!

Buying a home is a significant acquisition that can be more challenging for self-employed individuals and business owners to secure a home loan. Fortunately, several loan products are available to help them navigate the mortgage process and achieve their dream of home ownership.

Types of Home Loans for Self-Employed Individuals and Business Owners

Self-Employed Borrower Home Loan

A Self-Employed Borrower Home Loan is a home loan designed for self-employed individuals who need help meeting traditional loan income verification requirements. This loan product requires documentation such as tax returns and financial statements to verify the borrower’s income. The loan amount that can be borrowed will depend on the borrower’s income, credit score, and other economic factors. Self-Employed Borrower Home Loans typically have more flexible income verification requirements, lower credit score requirements, and lower down payment options than traditional loans, making it easier for self-employed individuals to qualify for a home loan.

No Income Verification Loan

A No Income Verification Loan is a type of home loan that does not require income documentation to be provided by the borrower. Instead, the loan approval is based on the borrower’s credit score and the value of the property being purchased. This loan product is typically used by self-employed individuals or those with irregular income who find it challenging to provide sufficient income documentation to qualify for a traditional loan. No Income Verification Loans may have higher interest rates and stricter qualifications than conventional loans due to the lack of income documentation. However, they offer a more straightforward application process and a faster approval time.

Stated Income Loan

A Stated Income Loan is a type of home loan that allows the borrower to state their income on the loan application without providing any income documentation to verify it. The loan approval is based on the borrower’s credit score and the value of the property being purchased. Stated Income Loans are typically used by self-employed individuals or those with irregular income who have difficulty providing sufficient documentation to qualify for a traditional loan. These loans are also known as “liar loans” since borrowers could overstate their income, making them riskier for lenders. Due to this higher risk, Stated Income Loans may have higher interest rates and stricter qualifications than traditional loans. However, they offer a more straightforward application process and a faster approval time.

Business for Self Loan

A Business Self Loan is a home loan designed for small business owners. This loan product is based on the borrower’s credit score and personal and business income. It allows self-employed individuals to use their business income as a source of income to qualify for the loan. The loan amount that can be borrowed will depend on the borrower’s business income, personal income, and credit score. Businesses for Self Loans typically have more flexible income verification requirements, lower credit score requirements, and lower down payment options than traditional loans, making it easier for small business owners to qualify for a home loan.

No Doc Loan

A No Doc Loan is a home loan that does not require any income or asset documentation from the borrower. The loan approval is based solely on the borrower’s credit score and the value of the property being purchased. No Doc Loans are typically used by self-employed individuals or those with irregular income who have difficulty providing sufficient documentation to qualify for a traditional loan. These loans are considered high-risk due to the lack of income documentation and contributed to the 2008 financial crisis. As a result, No Doc Loans are now more prevalent than they once were and may be harder to find. They may have higher interest rates and stricter qualifications than traditional loans if available due to their higher-risk nature.

Benefits of These Loan Products

One of the key features of these loan products is that they have more flexible income verification requirements, lower credit score requirements, and lower down payment options. These features make it easier for self-employed individuals and business owners to qualify for a home loan.

Consult a Financial Adviser or Mortgage Broker

Notably, these loans may have higher interest rates and stricter qualifications than traditional ones. Therefore, it is always good to consult a financial advisor or mortgage broker before making decisions.

Self-employed individuals and business owners have several loan products available to help them navigate the mortgage process and secure financing. These loan products include self-employed borrower home loans, no income verification loan

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