The conforming loan limits in California vary from county to county. There are 58 counties in California. Here is a very useful website to find the conforming loan limit in the county where your property is located.
How to Sign with DocuSign
The days of printing and signing documents by hand are nearly over. Today, there’s a much faster and more convenient method to provide your signatures.
Using the DocuSign service, we will periodically send you electronic documents requesting your electronic signature. This includes your basic application and letters of explanation.
The DocuSign service is very easy once you are used to it. Some people learn best by watching a video. The video above explains how to sign a document with DocuSign.
Palo Alto Jumbo Refinance for Debt Consolidation Cuts Payments in Half
This story was published in the San Francisco Sunday Chronicle Real Estate Section
- Property type: An owner-occupied single-family residence in Palo Alto
- Appraised value: $1,425,000
- Borrowing amount: $1,068,750
- Loan type: 10-Year Fixed Rate, Interest-Only Payment Option, 40-Year Term
- Rate: 3.500% / 3.548% APR
Backstory:
Clients successfully consolidated two car loans, four credit cards, a home mortgage and a home equity line of credit into one new loan. At 3.50%, the interest rate on the new loan is about 40% percent lower than the weighted-average interest rate of all the debt they paid off. Additionally, the new monthly payment is less than half the amount clients had to pay for their separate debts before the refinance. The client’s monthly cash-flow increased by $3,117 which they can now use for more a productive purpose like funding retirement accounts that earn more than the rate on the new mortgage and which grow on a tax deferred basis.
The new loan allows for interest-only payments for 10 years, but this is only an option. Clients are free to pay down principal on the new loan anytime they wish. Also, the new loan has a built-in fixed rate conversion option
How to Qualify for Jumbo Loan Based on Savings
This story was published in the San Francisco Chronicle Sunday Real Estate Section
- Property type: Owner-occupied single family residence
- Location: Menlo Park, CA
- Appraised Value: $1.87 million
- Borrowed Amount: $1.15 million
- Loan Type: 5 year fixed ARM
- Rate: 3.00% / 3.041% APR
Backstory:
This married couple refinanced their home loan to lower the interest rate from 5.50% to 3.00%. This reduced the interest expense on their home loan by 45%. The new loan only replaced their existing home loan balance. They did not take cash out and there was no other loan is second position.
What made this transaction unique is how they qualified.
Before coming to me, this couple had been frustrated to learn that they did not have sufficient income to qualify for a refinance on the traditional basis of calculating their income using their tax returns alone. A few other lenders had turned them down using this standard approach.
However, in the jumbo loan market, a few key lenders have discretion to qualify a borrower using an expanded approach that looks beyond just the income demonstrated by tax returns. (They have this discretion because jumbo loans today are often made by banks as an investment to keep on their books and not with the intent to sell the loan to a third party. They are not subject to the underwriting standards of what Fannie Mae or Freddie Mac will buy).
The expanded approach requires that the borrower has considerable financial assets (cash, stocks, bonds, or other marketable securities). The lender presumes that the borrower could, if necessary, spend down their financial assets to supplement their income. The basic formula is to divide the borrowers financial assets by 10 and add that figure to the borrower’s annual income.
In this case, the borrowers previously did not qualify because their housing debt ratio was more than 50% of their income. However, using the alternate expanded approach (called “asset depletion” in the trade), these borrowers were able to supplement their income for mortgage underwriting purposes. This brought their housing debt-to-income ratio under 30% and hence they qualified for the new loan.
Couple Saves $604/month by Refinancing Underwater Mortgage with FHA Streamline Refi
This story was published in the 
San Francisco Sunday Chronicle Real Estate Section
Property type: An owner-occupied single-family residence in Benicia
Appraised value: No appraisal required
Borrowing amount: $539,000
Loan type: FHA 30-year fixed
Rate: Fixed 3.750%
Backstory:
Because their home had dropped in value below the amount of their mortgage, these homeowners thought they were stuck with a much higher interest rate and higher payments. However, under the FHA streamline refinance program, an appraisal is often not required and the current value of a home is not important.
These borrowers were able to lower their rate from 5.50% to 3.75%, saving them $604 per month. They were also pleased to learn that, unlike many refinance transactions, the paperwork was easy. There was no need to document income with tax returns and W-2s and pay stubs. With less paperwork and no appraisal required, the whole process was faster too, closing in 34 days from start to finish.
The FHA streamline program can be a great opportunity if it fits. Homeowners must already have an FHA loan. And even though credit standards are more relaxed, the homeowner must be current on their mortgage payments.
Beyond saving money with a lower interest rate, another large incentive is coming. Beginning this June, President Obama has ordered that the upfront insurance premium required on FHA loans will be reduced to mere fraction of what it used to be. This will save the average FHA borrower thousands in closing costs.