Certified Long Beach mortgage advisor Jack Skovgard offers helpful advice when applying for a loan and what to look for when considering mortgage loan options.
Buying your first home can be scary and intimidating, especially when you need to start thinking about finances and getting a loan. Certified Long Beach mortgage advisor Jack Skovgard offers helpful advice when applying for a loan and what to look for when considering mortgage loan options.
The First Steps
When you book an appointment with Jack Skovgard, it is important to know your immediate and long-term goals.
“I generally ask how much you want to spend each month on your housing expenses and how much you can afford. A lot of people qualify for much more than what is realistic in their affordable day-to-day-life,” Skovgard said. “Finding that number is the most important part. There are taxes and insurance, and you’re most likely putting less than 20 percent down. I always get to know my clients pretty in-depth, so I ask questions about their family life and where their extended family is to understand their world a bit better. Once you understand what someone’s life is like, you can get a pretty good guess where they’re going to head for their loan option.”
Types of Loans
“I see a lot of people drifting towards FHA loans,” Skovgard said. This type of loan is insured by the Federal Housing Administration, where borrowers qualify with lower credit scores and put less money down, as low as three-and-a-half percent. For these reasons, FHA loans are a great choice for first-time homebuyers.
“There are your standard conventional loans, which our parents are used to getting, but it’s not usually realistic for millennials anymore because most of us aren’t staying in one place for 30 years. However, there’s an adjustable rate mortgage or hybrid, which is fixed for a certain amount of years and then becomes adjustable,” Skovgard said.
Skovgard adds that everyone is afraid of the word “adjustable,” especially with the fluctuation of the economy. Industry research suggests that on average, homeowners don’t go more than seven years without refinancing or selling their home to move. If you put yourself into a 5/1 ARM or 7/1 ARM loan, where your loan percentage is fixed for five or seven years and becomes adjustable within certain market caps, you’re setting yourself up for a more realistic scenario and can get better interest rate options rather than putting yourself into a 30 year fixed corner. Moving or refinancing before 30 years is extremely likely for most people today.
Use Outside Help and Be Resourceful
If you’re buying your first house, Skovgard says there are programs in California like the CalHFA program, which is a down payment assistance program that is very beneficial to anyone that fits within their county income bracket designated by CalHFA.
“It is definitely worthwhile to give me a call to check out what income limits you have in your area because you can get into a home through CalHFA through the use of their down payment assistance and you don’t have to put any money down. They’re basically providing you with a silent second mortgage that you don’t have to pay back until you either sell your house or do a cash-out refinance,” Skovgard said. There’s also a program through CalHFA called the ZIP Program, which is a closing cost assistance program. This way, you can get into a home with virtually no money down or out-of-pocket costs when closing the loan.
Visit Jack Skovgard’s website at www.jackskovgard.com to find out more about loan options. Call Jack today at 562-340-9453 to schedule an appointment.