You need to know the home buying process as first-time homebuyers in California. The process involves finding a real estate agent, inspecting the house, making an offer, and closing the deal. But the first thing you must know is how much you will need to pay for a down payment.
Read on to learn more about California mortgage down payments and how much you must put down.
What Is A Mortgage Down Payment?
A down payment is an amount you pay upfront when the loan transaction is processed. Your down mortgage payment is a percentage of your home’s buying price, which will reduce the total amount of money you’ll need to borrow.
How Do Down Payments Work?
Let’s assume you want to buy a home worth $500,000, and your mortgage lender requested for 20% down payment. You will pay $100,000 down and borrow $400,000; Down payments are required to show the lenders that you’re serious about buying the house and that you’re able to repay the money.
How To Determine My Down Payment Amount
The amount you’ll need to pay for a mortgage down payment in California is going to depend on different factors, like:
- Your credit score
- Your debt-to-income ratio
- The type of mortgage you choose
- Your mortgage lender’s requirements
- What grants and resources you can get
What’s The Least Amount I Can Put Down In California?
Different mortgage programs in California have different requirements regarding the minimum down payment. Here are the present percentages:
- Conventional loans allow borrowers to make a down payment as low as 3%, but it’s best to put 20% down payment to avoid paying private mortgage insurance.
- The FHA loan requires borrowers in California to make a minimum down payment of 3.5% of the purchase price.
- The VA loan program is for military members and veterans. This loan offers up to 100% financing, and homebuyers don’t have to make any down payment.
- United States Department of Agriculture (USDA) loan program provides mortgages to low-to-moderate income residents of rural areas. This loan requires a 0% down payment.
What Are Mortgage Down Payment Assistance Programs?
Since saving money for a down payment can be challenging for some homebuyers. Down payment assistance programs help homebuyers afford to pay their house down payment. The program offers low-interest loans by giving eligible buyers money to cover the needed costs. Your eligibility for mortgage down payment assistance programs depends on your chosen loan program and other varying factors. In most cases, these programs are only for those who haven’t owned a residential house in the past three years or first-time homebuyers.
Contact us For Mortgage Down Payment Assistance In CA
Your down payment is an essential component in the home buying process. Searching for the right mortgage in California and saving up for your down payment can feel challenging for you– but it doesn’t have to. At Dimitrije Isakovic Mortgage Group, we can help you get the perfect mortgage loan.
Call us today at 760-716-4041 for expert guidance.