Looking to purchase your first home and needing a little or a lot of assistance with the cost to purchase a home in California? Then you are on the right site to learn what is available for one to take advantage of. Lets explore some areas where you can find funds that can be used towards your down payment and/or closing costs. You will be required to come in with a down payment from 3.5% to 20% down of the purchase price unless you are utilizing the two 100% home loan programs (VA and USDA-RD) that do not require any down payment money and you are also required to pay for closing costs to that consist of upfront, lender, escrow, title and prepaid fees.
Lets start with down payment funds for the first time homebuyer. Once you have an open escrow, your EMD (Earnest Money Deposit) will go towards your down payment, discuss with your Licensed Real Estate Professional on what funds will be required to open escrow with. Areas where you can obtain your required down payment:
- NHF Grant program
- Gift from family members
- California, County and City first time home buyer programs
- Each county and city have their own DPA (down payment assistance program). Will need to contact each to see if they have funds available to lend and to see if you will meet their lending guidelines
- 401K and Retirement accounts (you will need to check to see what the requirements are to pull funds from these areas)
- Checking, Savings, Money Market, CD, etc
- Sale something of value with proper documentation to support the sale
- All fund used for the down payment most be source and seasoned, cash is not acceptable
The second part of the cost are the upfront fees, lender fees, escrow fees, title fees and your prepaid fees can be paid by these methods:
- You can request up to 6% of the purchase amount from the seller to assist with your closing cost. The seller will have to agree to this and you will need to discuss with your agent on how you wish to present your offer to the seller
- The lender can give credit towards your closing cost by means of increasing your fix interest rate, higher the rate you except designates a percentage that will be used to cover closing cost
- Closing cost can not be financed in the loan, the USDA-RD program is the only program that will allow you to finance closing in the loan and the way that can occur is the appraised value most come in higher than the agreed upon purchase price.
- CHDAP can also assist with this cost
- Same areas above in the down payment section can be used to cover the closing cost with the exception of the NHF program
If you are a first time homebuyer and very new to the home buying process, with my 20+ years in the business I am confident that I can be a key partner in your home process. Lets get started and explore the future of homeownership.