Purchasing a home can seem like a completely overwhelming endeavor. After all, it is one of the most significant investments you can make, with numerous steps and requirements.
However, various types of loans are available to Sonoma County first-time home buyers who require assistance.
First-time home buyer loans:
The average down payment for a house in California is between 15% and 20% of the purchase price. If you can afford this price, you can get a conventional loan with a low-interest rate.
However, there is some first-time home buyer who doesn’t have this much money saved for a down payment. Fortunately, there are mortgage plans that have a low-down payment:
VA loan: Sponsored by the Department of Veterans Affairs, VA Loans are open to veterans, reservists, active-duty personnel, and surviving spouses and are one of the only options available for zero down payment loans.
FHA loan: Backed by the Federal Housing Administration, FHA loans are open to anyone, and while they require a down payment, they can be as low as 3.5 percent. Drawbacks include a slower loan process and the need to pay mortgage insurance for FHA loans.
USDA loan: Organized by the U.S. Department of Agriculture as part of its Rural Development Guaranteed Housing Loan program. USDA offers financing with no down payment, lenient requirements, and competitive mortgage rates.
Conventional 97: With Fannie Mae, you may qualify to borrow up to 97% of the value of your home, leaving you with only 3% to cover your down payment. This type of loan requires a credit score of 620 and higher, and at least one of the borrowers must qualify as a first-time home buyer.
If you’re not sure which type of loan to get when buying your first home, your lender or realtor can help you find the right fit based on your finances, and your realtor can also guide you by discussing alternatives and developing a plan of action to achieve your personal real estate goals.
How to choose your realtor on your first home-buying:
When choosing a realtor, it’s essential to know how long they have been in residential real estate. Like most professions, experience is no guarantee of skill. However, a large portion of real estate is learned on the job. Randy and I bring 45 years of industry experience in residential, commercial, and land sales.
We are here to help you fill the gaps in your home-buying knowledge. The more familiar you are with the procedure, the less overwhelming it will be.
If you are considering becoming a homeowner in Sonoma County, we hope you’ll give us a call. There is never any obligation, of course—and the old saying is true in this case: it can’t hurt to ask!