Home Buying in Loma Linda>Question Details

Mark McLachl…, Home Buyer in Loma Linda, CA

First time homebuyers, graduating college next year, planning on purchasing home out of state after graduation. Various questions...

Asked by Mark McLachlan, Loma Linda, CA Wed Jun 8, 2011

My wife and I are currently about to enter our final year of college. We live in Nebraska but will be moving to Loma Linda, California immediately after graduation, as I will be attending med school there. My wife will be teaching, but she has not set up a job yet, as we still have quite a few more months before the move. Because I will not be working during med school, we are expecting to have a gross annual income of $40,000-$50,000. We are looking at properties in the $140,000-$175,000 range and are planning on taking out an FHA loan. We also want to have closed on the house before we move out there in May 2012.

My questions are:

When should we start the pre-approval process for loans? (Because we are currently working part time, minimum wage, our current income would obviously not benefit us when compared to the income we will have after graduation.)

What FHA down payment assistance programs are available?

When should we expect to begin making offers on potential properties?

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Answers

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BEST ANSWER
It's possible you could get pre-approved based on an unknown amount of an employment contract - but you wouldn't be able to close on a home with a mortgage without the contract details in writing, and so making an offer on a home prior to having the full details of the employment contract is extremely risky.

You'd just need to have the employment contract prior to closing - underwriter needs to review, so probably give 2 business days from when you deliver it to the loan officer until the underwriter has signed it off. If that is the last item on your conditional loan approval then you could in theory go to closing 2 days after it's been signed off by the underwriter.

There are a couple more forms that need to be signed on an FHA loan rather than a conventional loan, but if the loan officer and real estate agents are all on the ball from the beginning then the processing time should be practically identical in both transactions. FHA 203k (rehab version of FHA) can take about a week longer since there is a contractor approval process, but if that part is lined up ahead of time then the contractor approval process can run concurrently with the credit/loan approval portion.

I'd say a good 8-9 out of 10 residential mortgage lenders offer FHA financing, over the past 3-4 years it's become more and more popular, particularly in California when FHA increased it's maximum loan amounts. One of the more important items you'll need to look for in a lender is one that accepts the employment contract, not all lenders do and I'd estimate out of a sample size of 9 lenders who offer FHA financing I've found on average that 4 will want to see you have a paycheck stub covering 30 days of pay prior to being able to close. Additionally you'll also want to make sure the lender offers a pre-approval process that involves an underwriter reviewing your loan, rather than just the loan officer & their processor. This ensures that the only thing that will stop you from buying a home is the property itself (doesn't appraise, in bad condition, etc).

If you get fully pre-approved ahead of time then you should be able to get down the total escrow time to around 3 weeks, but a 30 day escrow period is standard.
1 vote Thank Flag Link Sat Jun 11, 2011
Hi Mark
You should start shopping for a home now. There are a lot of nice neighborhoods around LL, like Redlands. Here is an ad -free MLS site . Get an agent known for being a buyers agent! I have heard good things about Janet Burke at C-21 Lois Lauer
Make sure you get a good inspector. Redlands has a couple that have been doing it for over 20 years.
There are good deals, but, many houses have been vacant for quite some time. best of everything to you!
1 vote Thank Flag Link Mon Jun 13, 2011
FHA purchases are for owner occupied homes as you probably are aware, and as such they require you to have qualifying employment and/or an income source that could be sustained while living in the home you are purchasing.

Transferring with your current employer is the ideal situation when making a long distance move and aiming to qualify to buy a home in the new location simultaneously... however not everyone's situation is deal. When you are instead going to be starting employment with a new employer FHA financing requires typically either requires a paystub showing that you've been paid for a total of at least 30 days OR a non-revocable contract for employment with a start date no later than 60 days from the closing date on the home.

You must also have sufficient income or cash reserves to support the mortgage payment and any other obligations between loan closing and the start of employment, so if you have $3k in the bank after closing, and your new mortgage payment is $1.5k, and your other payments are $500/mo (car payment, credit cards, student loans, etc.), because your 1st mortgage payment usually doesn't happen until the rest of the month you close in + the entire following month have elapsed (so closing on June 8th usually has a first payment due date of August 1st ) you'd really only have 1 month of mortgage payment + 2 months of the other payments to cover, or $2.5k, and your $3k would cover those until the employment begins.

Then later after closing, and after you begin employment, you need to provide a paystub or the lender contacts your employer to confirm you have begun.

You can find FHA's exact verbiage on it at: http://www.fhaoutreach.gov/FHAHandbook/prod/infomap.asp?addr…

It's never too early to go over your situation in full detail with a loan officer, and it doesn't mean your credit needs to be checked either. But unless you absolutely know that your income, plans, etc. are all going to work down the road, I suggest you start planning as soon as you are ready. Keep in mind that some pertinent details won't be known such as employment and exact income, but you can get a plan of attack with the missing variables that can be filled in along the way, so you can "hone" your situation until you have pretty much everything figured out.

CalHFA is a popular 3% down down payment assistance program available throughout most of California: http://www.calhfa.ca.gov/homebuyer/programs/index.htm - it has some limitations, the processing time is on the longer side and sometimes their funding runs out, but if it's available it's an excellent way to get into a home with little money out of pocket.

San Bernardino County has some, but may not help out your precise situation: http://www.sbcountyadvantage.com/Housing-Assistance.aspx
1 vote Thank Flag Link Wed Jun 8, 2011
Hello Mark, Yes you should speak with me to go over options if you haven't bought already. I can qualify you right out of college with only one month pay stubs. I also specialize in Under 640 Fico Score Loans and offer credit repair at no cost to raise fico scores to qualify. I also offer CHF Access half percent down payment with a minimum 580 fico score or NO FICO scores.

Click the following URL to see the Listings Loma Linda up to 200k:

http://www.mrmlsmatrix.com/DE.asp?ID=17808305865

They start at 135k which is only $700 down and $988PITI and up.

Here is a link, flyer, maximum income limits for CHF Access and a needs list to gather for processing a loan approval. Here is what is available in Loma Linda up to 200k to study. Let me know if you have any interests in any homes or discussing loan programs to assist you in your home purchase. I can get you into a home of your choice with minimum out of pocket expenses.

http://www.under640ficoscoreloans.com/Pages/HalfPercentDown.aspx

CHF Access half percent down flyer, pdf
http://tinyurl.com/9ewk9nq

Sheryl Arndt, standard needs list checked, pdf
http://tinyurl.com/9m2rsb2

Why Rent brochure
http://www.frankandsheryl.com/Documents/Why%20Rent%20brochure…
http://www.frankandsheryl.com/Documents/Why%20Rent%20brochure…

CHF Access income limits http://tinyurl.com/8lzf8he

http://www.under640ficoscoreloans.com/Pages/ContactSheryl.aspx
Sheryl Arndt, Real Estate Broker – Sr. Loan Officer CA only
REO & Short Sale Specialist
20+ Years Experience
DRE# 01140252
NMLS# 297251
760-486-4225
0 votes Thank Flag Link Sun Nov 11, 2012
You are welcome, glad my information has helped point you in the right direction. Good luck with the process and we look forward to you moving here.
0 votes Thank Flag Link Mon Jun 13, 2011
Thank you everyone once again for the input. It has been incredibly helpful having these questions of mine answered here. I have been further researching our options and I've recently come across the CalHFA FHA program, which appears to be a good fit for our circumstances. I would also hope to be able to use the CHDAP program in conjunction with that, in order to assist us in our down payment.

Shane, thank you for your explanation regarding choosing a lender. I've made contact with a few lenders in San Bernardino County that are equipped to process CalHFA loans and also inquired about the employment contract, and so hopefully I'll find a good match with one of them.
0 votes Thank Flag Link Mon Jun 13, 2011
Is your wife's teaching job going to begin in May. If so then you can start shopping 8 to 10 weeks prior to your planned move. If she will not receive her fist paycheck until the fall then buying may prove difficult. To reiterate Shanes very detailed answer, "One of the more important items you'll need to look for in a lender is one that accepts the employment contract, not all lenders do and I'd estimate out of a sample size of 9 lenders who offer FHA financing I've found on average that 4 will want to see you have a paycheck stub covering 30 days of pay prior to being able to close. " Make sure your lender is 100% sure of this issue.
0 votes Thank Flag Link Sat Jun 11, 2011
Thank you so much everyone for your input and advice. The additional costs that would be involved with moving into a rental and then moving once again shortly after are something we would like to avoid. I have two more questions, as well:

We are hoping to be able to have an employment contract set up for my wife as early in 2012 as possible. If we continue with our plans of having closed on a house before we arrive there in mid-May, when would a realistic deadline be for needing the contract in hand? (We will obviously only be able to obtain a pre-approval letter once we have her new contract, as our current income is significantly lower). Also, I have heard that the escrow period can sometimes be slightly longer when an FHA loan is involved, as opposed to a conventional loan, so I know we would have to keep that in mind as well, if that is in fact true.

I know that not all lenders work with FHA mortgages. Are there certain lenders that would possibly be significantly easier to work with considering our situation?

Again, I really appreciate any information/help that is given!
0 votes Thank Flag Link Sat Jun 11, 2011
Though it would be ideal to own a home as soon as you move here I'd advise against it. A significant number of Loma Linda doctors live in Redlands. A reasonable (1300 sqft in 92373) home is 200k - 230k. The cheaper homes in Loma Linda are not desirable. Teaching jobs are very scarce with the economy in California being the way it is. I have several well educated friends that are unemployed teachers. The Inland Empire unemployment is over 20% and that doesn't count the illegal workers that went back home.

That being said I suggest you shop craigslist for duplexes in Loma Linda and Redlands a month prior to moving. If it becomes too difficult to find a private owned unit there are several month to month units in Redlands for under $1100 a month. After you have a sense of job security and cost of living then start looking for a home. You'll find your needs and budget will change greatly.

If you'd like, hold on to my info and I could show you around when you get here.
0 votes Thank Flag Link Thu Jun 9, 2011
Because the real estate market and financing terms or conditions are constantly changing, start the buying process about 3 months before you graduate. You should also consider renting for a few months to get to know the areas better, work establishing credit, etc!
0 votes Thank Flag Link Wed Jun 8, 2011
Shane, the mortgage broker, did a great job at answering your financial part of the question. Now as for making offers on properties, you will need a preapproval letter from a lender in order for your offer to get submitted. To get preapproved, you do need that first 30 day paystub. If you both are graduating at the end of May 2012, I'm not sure you can close on a house before you get here. Once your wife has that teaching contract and paystub, we should be able to get the preapproval letter and start looking. Right now that price range is hard to find within the city limits of Loma Linda but within a 5 mile radius of the campus is possible. I've helped others accomplish that over the last 30 years since I live in that area. If you have any other questions, please feel free to contact me at 909-796-2947.
Pixley Lewis Remax Advantage
0 votes Thank Flag Link Wed Jun 8, 2011
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