YOUR TRUSTED MORTGAGE LENDER
A home is one of the biggest purchases you will make in your life, which is why it's important to find a lender you trust. As one of the leading, local brokerages in Southern California, we are committed to helping you find a personalized home loan that fits your family's unique circumstances.
WHY CHOOSE US
At NXT Steps Solutions, you’re not just another number. With over 20+ years of experience in the mortgage industry, we provide top-tier, personalized and family-focused service. When you work with us, you get:
PERSONAL TOUCH
CUSTOMIZED LOANS
PERSONAL TOUCH
With NXT Step Solutions, you’re not just another number. We care for you like family because, well, we are a family.
REAL SAVINGS
CUSTOMIZED LOANS
PERSONAL TOUCH
Working with an independent mortgage professional, as opposed to a big bank or corporation, provides you with faster closings, better service and lower rates.
CUSTOMIZED LOANS
CUSTOMIZED LOANS
CUSTOMIZED LOANS
Home loans are not one-size-fits-all. We offer you home loans for anything and everything. and put loans together that are personalized just for you.
WITH US, YOU CAN:
Lower Your Interest Rate
Lower Your Interest Rate
Lower Your Interest Rate
Lowering your interest rate can lead to a lower monthly payment, giving you more money to spend with your loved ones and/or payoff your mortgage sooner by making additional payments towards the principal balance of your mortgage.
Purchase A Home
Lower Your Interest Rate
Lower Your Interest Rate
We have access to a vast array of home loan products to meet your specific needs. Whether you are a first time home buyer, or a seasoned investor we have a solution for you.
Receive Appraisal Waiver
Receive Appraisal Waiver
Receive Appraisal Waiver
You may be eligible for an appraisal waiver, allowing you to save hundreds of dollars on the appraisal fee, close faster (usually 17 days or less), and eliminate the worry of a low appraised value.
Refinance
Receive Appraisal Waiver
Receive Appraisal Waiver
Take Cash out. Already have 20% equity in your home? You can be eligible for a cash out refinance. It's a great way to consolidate your bills by paying off: high interest credit cards, car loans, personal loans, home equity line of credit w/ adjustable interest rates, home improvements, and investments.
SO, WHAT ARE THE NXT STEPS?
Ready to buy a house but aren’t sure of all the different loan types available?
Let’s start by comparing two common types of mortgage loans:
Conventional loans and FHA loans .
CONVENTIONAL VS FHA LOANS
Conventional Loans
Conventional Loans
Conventional Loans
Conventional loans aren’t insured or guaranteed by a government agency, they’re insured by private lenders. You need to have a higher credit score, lower debt-to-income (DTI) ratio and down payment to qualify.
FHA Loans
Conventional Loans
Conventional Loans
An FHA loan is a government-backed home loan insured by the Federal Housing Administration. An FHA loan has less restrictive qualifications, which can make it a good choice if you’re worried about coming up with a down payment and/or have a lower credit score.
DOES CREDIT MATTER?
When you're looking to take out a loan, lenders will first take a look at your credit. Your credit score is a three-digit number that represents the amount of risk a lender takes on when you borrow money. Credit scores range from excellent (800 and above) to poor (350 – 579), and it’s all based on your credit history, among other factors. The higher your credit score, the less risky you are to a lender.
Most lenders look at your FICO® Score, a credit scoring model developed by the Fair Isaac Corporation, which ranges from 350 points (low) to 850 points (high). Your credit score and information are reported by each of the three major credit bureaus: Experian®, Equifax® and TransUnion®. Your score may vary between credit bureaus.
The following factors are taken into consideration to build your score: Whether you make payments on time; How you use your credit; Length of your credit history; Your new credit accounts; Types of credit you use.
CREDIT SCORE REQUIREMENTS
FHA CREDIT SCORE REQUIREMENTS
CONVENTIONAL CREDIT SCORE REQUIREMENTS
CONVENTIONAL CREDIT SCORE REQUIREMENTS
You can qualify for an FHA home loan with a credit score as low as 500, but it does come with strings attached. For example, you need to be able to put 10% down in order to get an FHA loan with a credit score of 500. The higher your credit score, the lower your down payment needs to be for an FHA loan. Generally, most FHA loan lenders require borrowers to have a credit score of 580 and above.
CONVENTIONAL CREDIT SCORE REQUIREMENTS
CONVENTIONAL CREDIT SCORE REQUIREMENTS
CONVENTIONAL CREDIT SCORE REQUIREMENTS
Credit score requirements for a conventional loan vary depending on the lender. However, you generally need a minimum credit score of 620 or higher in order to qualify for a conventional mortgage. The credit score requirement is higher for conventional loans compared to FHA loans due to the lender takes on more risk, and conventional loans don’t have the backing of a government agency.
DOWN PAYMENTS
FHA DOWN PAYMENT
CONVENTIONAL DOWN PAYMENT
CONVENTIONAL DOWN PAYMENT
You can put down as low as 3.5% for an FHA loan, but you’ll need to have a credit score of at least 580. If your credit score is lower, in the 500 – 579 range, you’ll be required to put 10% down. Here’s an example of how much you’d pay for a down payment on both types of loans:
- Conventional loan down payment of 20% on a $200,000 house: $40,000
- FHA loan down payment of 3.5% on a $200,000 house: $7,000
CONVENTIONAL DOWN PAYMENT
CONVENTIONAL DOWN PAYMENT
CONVENTIONAL DOWN PAYMENT
Contrary to popular belief, a 20% down payment is not a requirement to obtain a conventional loan. However, if you can’t come up with a 20% down payment, you’ll have to pay private mortgage insurance (PMI), which is a lender’s protection in case you default on your loan. A smaller down payment equals more risk, so you mitigate that risk for the lender when you pay for mortgage insurance. PMI payments are built directly into your monthly mortgage payments.
INTEREST RATES
Mortgage interest rates are affected by high-level factors, such as: the state of the economy, Investor demand, and the Federal Reserve. Lenders take into account your credit score, the amount you borrow, and down payment amount.
FHA INTEREST RATES
CONVENTIONAL INTEREST RATES
CONVENTIONAL INTEREST RATES
FHA interest rates can be more competitive compared to conventional mortgages because the government backs the loan and decreases the risk for your lender. Your interest rate depends on several factors, including market interest rates, your income, credit score, the amount you plan to borrow, your down payment amount and more.
CONVENTIONAL INTEREST RATES
CONVENTIONAL INTEREST RATES
CONVENTIONAL INTEREST RATES
Conventional loan interest rates depend on the factors you can influence. They include your credit score and loan-to-value ratio (LTV). LTV ratio refers to the amount of loan you take out relative to the value of the property that secures a loan.
LOAN LIMITS
FHA LOAN LIMITS
CONVENTIONAL LOAN LIMITS
CONVENTIONAL LOAN LIMITS
New loan limits are set on FHA loans every year. These limits depend on where in the U.S. you consider a home purchase. The upper limit in low-cost counties is $420,680, such as in rural Missouri, and the upper limit in high-cost counties is $970,800, such as Orange County, California.
The easiest way to determine the upper limit in your county is to visit the HUD website for FHA mortgage limits. If you choose to go with an FHA loan over a conventional loan, it’s important to remember that these loan limits might cap the amount of home you can purchase.
CONVENTIONAL LOAN LIMITS
CONVENTIONAL LOAN LIMITS
CONVENTIONAL LOAN LIMITS
In 2022, conventional loan limits for one-unit family homes in the lower 48 states is $647,200, and for Alaska and Hawaii, its $970,800. For high cost areas, it’s also $970,800. High-cost areas exist in the District of Columbia and the following states: California, Colorado, Connecticut, Florida, Georgia, Idaho, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Tennessee, Utah, Virginia, Washington, West Virginia and Wyoming.
If you need a loan for a home that exceeds these loan limits, you need to consider something called a jumbo loan. Jumbo loans are non-conforming loans because they aren’t backed by Fannie Mae or Freddie Mac. They usually have stricter underwriting guidelines because they’re riskier for a lender.
MORTGAGE INSURANCE
FHA MORTGAGE INSURANCE
CONVENTIONAL MORTGAGE INSURANCE
CONVENTIONAL MORTGAGE INSURANCE
A mortgage insurance premium (MIP) is a required payment for an FHA loan. FHA loan mortgage insurance is typically paid for the life of your loan, unless you make a down payment of 10% or more, in which case MIP comes off after 11 years.
You’ll pay an upfront mortgage premium (UFMIP), which normally amounts to 1.75% of your base loan amount. You also pay MIP payments of approximately 0.45 – 1.05% of the base loan amount, all based on the term (length) of your mortgage, your loan-to-value ratio (LTV), your total mortgage amount and the size of your down payment.
CONVENTIONAL MORTGAGE INSURANCE
CONVENTIONAL MORTGAGE INSURANCE
CONVENTIONAL MORTGAGE INSURANCE
If you don’t put at least 20% down for a down payment, you’re required to pay for private mortgage insurance (PMI), which can come in several forms:
- The most common is that you pay a monthly premium, which is an annual rate divided by 12.
- A single premium policy is another option, which involves an upfront payment.
- A split premium is an upfront payment as well as a monthly premium, and ideally, a seller will pay the upfront premium.
- Lender-paid PMI is also another option, in which the lender purchases the insurance and you pay it back at a higher interest rate. You cannot cancel lender-paid PMI.
WHICH LOAN TO CHOOSE?
WHEN AN FHA LOAN MAKES SENSE
WHEN A CONVENTIONAL LOAN MAKES SENSE
WHEN A CONVENTIONAL LOAN MAKES SENSE
An FHA loan makes the most sense if you:
- You don’t have a high credit score.
- You don’t have much money for a down payment.
- You have a higher DTI. (debt to income ratio)
WHEN A CONVENTIONAL LOAN MAKES SENSE
WHEN A CONVENTIONAL LOAN MAKES SENSE
WHEN A CONVENTIONAL LOAN MAKES SENSE
If you want to try for a conventional loan, make sure that:
- Your credit score is at least 620.
- You have a down payment equal to at least 3%, or 20% if you want to avoid PMI.
- You have a low debt-to-income ratio, or DTI, which compares your monthly debt payments to your monthly gross income.
- You want flexible repayment terms.
READY FOR THE NXT STEP? HAVE MORE QUESTIONS? WE'RE HERE FOR YOU.
Are you a first-time or seasoned investor? We also have something for you. Contact us to learn more.
VIALOS Partners, INC. dba: NXT Step Solutions is a California Corporation. Licensed under the
California Department of Real Estate LIC. 02172262 NMLS: 2286835
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