If you’re a first-time home buyer in California, you’re probably already overwhelmed just thinking about the whole process. There are so many steps you’ll have to do that it may feel like you’ll never get the keys to your dream home. We hope the advice in this article can help you better understand this aspect of the home buying process.
First of all, you don’t want to wait until you’ve found the home you want to buy before you think about how to finance it. One of the initial steps to buy a home is to explore your California mortgage choices so you can be ready to make an offer when you find the home you want. Research a variety of lenders—then, spend the time to talk to your top few choices to ask questions and find out what kind of mortgage is right for you.
You should know that a 30-year fixed-rate loan is the right choice for many people, but it’s not the only kind of California home loan you’ll be able to find. Depending on your unique circumstances and goals, do some research to find out whether a different kind of loan might suit you better.
The amount of your down payment amount will affect your loan choices and your costs. Many home buyers in California choose to put less than 20 percent down. There are multiple options for buyers with less than a 20% down payment. Be aware that if you put less than 20 percent down, you will likely need to pay for mortgage insurance—which adds to your loan costs, but can help you get a loan you might otherwise be unable to get. Mortgage insurance protects the lender if you fall behind on your payments, which means lenders are more willing to lend to you. Mortgage insurance doesn’t protect you or pay your mortgage for you. Learn more about mortgage insurance and how it works.
You might also want to look into a variety of programs available to first-time home buyers, including:
- FHA loans. California FHA home loans are government-backed by the Federal Housing Administration, and help people buy moderately priced homes with a down payment as low as 3.5%.
- VA loans. California VA home loans are also government-backed, by the US Department of Veterans Affairs (VA); they offer loans that helps service members, veterans, and surviving spouses purchase homes.
- The Good Neighbor Next Door Sponsored by the Department of Housing and Urban Development (HUD), this program is for buyers who are teachers, law enforcement officers, firefighters and emergency medical technicians, or EMTs—buyers who don’t belong to those professions can’t participate in the program. In most cases, the house must be located in a revitalization area community where the buyer works; for example, a teacher would need to buy a home in the district where their school is located.
- USDA loans. Believe it or not, the US Department of Agriculture (USDA) offers home loans. These California mortgages are for eligible rural and suburban homebuyers. You don’t need to buy or run a farm to qualify for a USDA loan. USDA loans feature fixed loan payment rates, and don’t always require a down payment.
- Local first-time home buyer programs and grants. Many states and cities have programs that are designed to help first-time buyers in their communities.
At Golden State Mortgage, we are a California-based mortgage company, and specialize in FHA home loans for first time home buyers. FHA loans are a great option for first time home buyers—and, if this is your first home purchase then California FHA home loans are probably your best option due to the low down payment and easier credit standards . Your down payment can be as low as 3.5% of the purchase price, and closing costs and fees can be covered by the seller. Call Lone Star Financing today at 1-800-585-6886 or fill out the quick contact form at https://goldenstatem.wpengine.com to speak with a California FHA loan consultant and get a free good faith estimate.