First Time Buyer
First time home buyers often look for a home before they take the time to get “pre-approved”. This can lead to disappointment if they can not qualify to purchase a property that they would like. A first time home buyer can avoid being disappointed by getting pre-approved not pre-qualified. With pre-qualification, a lender tells you “how much you can qualify for” based upon information you provide but they don’t commit to making you a loan.
On the other hand, a pre-approval involves filling out an application, submitting documentation, and obtaining a formal pre-approval letter. This letter will give you greater negotiating power and let sellers know that you are a NO problem buyer.
How to buy a home with limited money down! There are still first time home buyer programs that offer low down payment options with approved credit. Don’t put off buying because of a lack of funds; there are many flexible loan programs to suit your financial situation.
You can still buy a home with damaged credit! You should not pass up the opportunity to own a home because you feel that your credit is not good enough to qualify. Consulting with one of our professionals in advance can help bring forward any potential issues you might have. This will also give you the chance, if needed, to take the necessary steps to improve your credit rating or correct and discrepencies
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If you don’t currently qualify for a home loan, we can help guide you through the steps needed to become mortgage-ready. This may include improving your credit profile, documenting income properly, building savings for a down payment, and identifying homebuyer assistance programs that may be available to you. Understanding how credit works is often the first step in preparing for homeownership. For a helpful overview of how credit scores are calculated and what lenders look for, you can review Experian’s Understanding Credit Guide, which explains the key factors that influence your credit and how to improve them: https://www.experian.com/blogs/ask-experian/wp-content/pdf/experian-credit-guide.pdf
Common First-Time Buyer Programs:
FHA
This government-backed loan allows a first-time buyer to purchase a home with as little as 3.5% down. Lower FICO scores are acceptable.
CalFHA
This program is similar to FHA; the California Housing Department supports it and allows as little as a 3.5% down payment. CalHFA offers several options for down payment and closing cost assistance. This type of assistance is often called a second or subordinate loan.Â
CalHFA’s subordinate loans are “silent seconds”, meaning payments on this loan are deferred, so you do not have to make a payment on this assistance until your home is sold, refinanced, or paid in full. This helps to keep your monthly mortgage payment affordable.
VA
The Veterans administration sponsors this program and allows qualifying armed force veterans to purchase a home with 0 Down payment.
County and City Assistance
Interested in what State, County, or City assistance is available? Click here for a Down Payment Assistance Program in California.
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