CalPERS Home Loan Program - Your Thoughts? (mortgage, credit)

[BNR_1]

Can anyone shed light on the pros and cons with obtaining a 30-year fixed conforming loan under the CalPERS home loan program? I am strictly looking for a conventional loan and will be meeting the 80% LTV ratio. For those who are a CalPERS lender and those who have actually obtained a loan through CalPERS I would appreciate your experience and thoughts. I also welcome input from anyone that has general information about the loan program.

I visited the site and did some research but I couldn’t find a lot of information. I checked with colleagues and none went through CalPERS for their loan. They just did not consider the agency because they forgot to and instead went with the large banking institutions. Most of the information from the CalPERS’ site is very general

I originally posted these questions on the Mortgage forum site, but received no responses. It was probably too specific to California.

Thank you

[DMenscha]

I know a couple of people who got a CAlpers loan. I don't think that they think it was anything special. If the property is in decent condition, I think you're better off getting an FHA loan.

[BNR_1]

Originally Posted by DMenscha

I know a couple of people who got a CAlpers loan. I don't think that they think it was anything special. If the property is in decent condition, I think you're better off getting an FHA loan.

FHA loan....why so?

Thanks

[wcaamyg]

We are preapproved for a CalPERS loan and just looking for the right property. There are a couple of perks with CalPERS. One of the perks is that they cap how much you can pay for closing costs. Another perk is that you have two free "float down" options. So, if rates are at 5.5% when you go under contract, you lock at 5.5%. Then, if rates go down, you can float the rate down at loan approval and at document draw time should rates be lower.
If you don't have 20% down, CalPERS also has an FHA program, but the rate is higher (I think it is .25% higher).

[BNR_1]

WCA did you compare the costs of the CalPERS loan with other institutions? I did a quick comparison and at the time I compared (last week) it did not seem that much less when considering the origination, buydown, and the adverse market delivery charge. My credit should be good (been a while since I last saw a FICO score) so the adverse charge should be around 0.25%. I compared costs without the option of the buyup because my preference is to get a lower interest rate.

BTW as of 10/19/2009 CalPERS no longer offers the float down option. Oh well.

As you indicated, it appears that the CalPERS loan should be lower than the average banks because of the agreed upon lower costs to apply for and qualify for a home loan. Just my initial and very quick comparison with other lenders did not appear so. This is what led me to the forum to ask these questions. Am I missing something with regards to the CalPERs loan?

Thanks

[wcaamyg]

BNR-1 - I had not heard about the ending of the float-down option. We have been pre-approved for a while and just hadn't found a property we liked to buy. That is a major drawback!
I also compared the closing costs to two other banks and didn't see much of a difference either - I thought it was just me.
Hmmm.....CalPERS loan is looking a lot less attractive now.

[BNR_1]

WCA thanks for the follow up. As everyone always recommended make sure to compare costs (APRs). I spoke to a CalPERS lender and the information he provided made the CalPERS program so much more cost attactive than other big lenders. But your information supports my suspicion that it may not be all that much better. Anyhow the search continues.

Thanks and Happy New Years to all.