Mortgage Programs

Helping You Determine the Best Mortgage for Your New Sonoma County or Napa Valley Home

Before you decide to buy a home in Sonoma County or in the Napa Valley, you should learn as much as possible about the mortgage process. This guide to the mortgage process provides information that will help you work with mortgage lenders, decide how much you can afford, where to look for the best rate and what type of mortgage is best for you. Knowing what to expect, especially if you are a first time homebuyer, may make it easier for you to get through the process.

Determine the Home Mortgage You Can Afford

Before you shop for your new home in Sonoma County or in the Napa Valley, you should first know what you can comfortably afford. Having this figured this out will help you decide what price range to look in. Some of the things that you should take into account (because mortgage lenders certainly will) can include:

  • Gross monthly income
  • Amount of outstanding debts
  • Credit score and credit history
  • Your personal savings
  • How much you have for a down payment
  • Current mortgage rates
  • Any future plans to start a family

To help you determine how much you can afford to spend on a mortgage, you may want to use this “Mortgage Affordability Calculator”, which is provided by Ginnnie Mae.

Shopping Mortgage Rates

Now that you know the mortgage you can afford, you should be concerned with the mortgage rates. Knowing exactly what the current mortgage rates are can help you ensure that you won’t be paying too much with the particular home loan you get. One of the more reliable websites to go to for current mortgage rates is You will find current rates for a 15-year mortgage, 30-year mortgage and 1-Year Arm. Rates can vary from lender to lender, so make sure you shop around!

Which Mortgage Type is Best for You?

There are many types of mortgages you can choose from. Which type you choose usually depends on the length of time you think you’ll be in your home or the other financial obligations you have. Most types of mortgage loans fall into two major categories: fixed or adjustable rate. These two types of loans are very different and each work for very different kinds of borrowers. But there are also hundreds of different kinds of loans available to borrowers. Before your speak with your mortgage lender, it’s a good idea to become familiar with the more common mortgage types. As always, feel free to call the for assistance.

Adjustable Rate Mortgage Adjustable rate mortgages carry an interest rate that changes to keep pace with current market rates. This may be a good idea for buyers planning to stay in their home for a short time. If you plan to stay in the home for an extended period of time, you’re better of locking in a fixed rate with a conventional loan.

Assumable Mortgage An assumable mortgage is a loan that stays with the property. It is simply transferred to the qualified home buyer. This means considerable savings for the next buyer. It may include no points, no interest rate change and low closing costs. Assumable mortgages are often the most valuable part of a property. FHA loans given before December 1, 1986 and VA loans given before March 1,1988 are completely assumable to the qualified buyer. This means that you can take the loan along with the real estate, just as it stands.

Balloon Mortgage The Balloon Mortgage has a fixed rate for a certain time frame, typically seven years, followed by a “balloon” payment requiring repayment of the entire home loan balance. Interest rates are generally lower than conventional loans. People may choose this type of loan because they plan on either selling the home, paying it off, or refinancing before the balloon payment is due.

Bridge Loan Most people need the equity in their current home to purchase a new one. But what if you sell first and don’t have anywhere to go? A bridge loan may be an option. A bridge loan is a temporary loan that you obtain from your lender until the permanent one can be put in place. Once the primary mortgage is in place, the bridge loan is paid off and closed out. But understand that while waiting for a closing on your home, you will be making two mortgage payments. You will owe your present mortgage payment plus the payment on the bridge loan. Be certain you can afford it.

Conventional Mortgage A conventional mortgage offers a fixed rate. They typically come in 10, 15 or 30-year loans. Although conventional loans used to require 20% down, most people today put 10% down (68% of buyers today put less than 20% down). Just keep in mind, if you put less than 20% down, you’ll be asked to carry private mortgage insurance (PMI). If you’re a first-time homebuyer, there are many low down payment loans available that ask for 3-10% down.

FHA Mortgage FHA Mortgages Loans through The Federal Housing Administration (FHA) help low-to-moderate income home buyers purchase homes with low down payments (approximately 3%). You can use a gift or unsecured loan for the down payment and closing costs. Also, these loans are usually assumable (along with the current interest rate) by the next qualified home owner when you sell your home, which is an added benefit when it comes time to sell.

VA Loan Veteran Affairs loans are great because they provide the opportunity to buy a home with no down payment. They are offered up to a predetermined loan amount (not more than $200,000) and are assumable by qualified buyers. To qualify for a VA loan, the veteran must be on active duty or have a discharge (other than dishonorable), along with one of the following:

  • 180 days active (not reserve) duty between September 16, 1940 and September 7, 1980
  • 90 days service during a war (Korean, Vietnam, Persian Gulf, etc.)
  • Six years service in the National Guard

Contact the Stornetta Team Today for all Your Sonoma County and Napa Valley Home Buying Needs!

To learn more about the home buying process or to schedule a private showing of any home found on our website, feel free to call us today at (707) 815-8749. We appreciate your stopping by and look forward to speaking with you!

www.WineCountry-Real is owned by Mark Stornetta, who is a licensed REALTOR® of Alain Pinel Realtors, Sonoma, CA 95476. (707) 815-8749, DRE #01440416. Alain Pinel Realtors is licensed in the State of California, is an Equal Opportunity Employer and supports the Fair Housing Act. Information deemed reliable but not guaranteed.