Do you need 20% down?
In a high cost area like Southern California saving for a down payment is a huge part of buying a house. It can take years to save up a 20% down payment. Luckily there are other loan options available to you!
If you're a veteran you can take advantage of the VA loan and purchase a home with zero money down. For everyone else there are FHA and conventional loans. The minimum down payment for a FHA loan is ony 3.5% and the minimum down payment for a conventional loan is 5%.
FHA and conventional loans with less than 20% down require mortgage insurance, but it can still be a better option for most buyers. Buyers are able to purchase a home now instead of waiting years to save enough for a 20% down payment. The home you purchase now will likely appreciate in value and build you equity during the time it would have taken to save for a larger down payment.
The newest option for first-time home buyers is the California dream for all shared appreciation loan. This program assists buyers with a 20% down payment if they qualify. Upon the sell or transfer of the home, the buyer repays the original down payment loan, plus a share of the appreciated value of the home. The first round of funding was distributed very quickly in early 2023, but a second round of funding has been approved and we anticipate a release date in early Spring of 2024.
If you want more information about your loan options please give me a call or text at 760-465-2858.