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First Time Home Buyer - What You Need to Know About the Process of Purchasing a House

First Time Home Buyer Loan

Is there a first time home buyer loan? Even better... There's a range of loan programs and options that can fit everyone's needs, whether it's an FHA loan with 3.5% down, an 80-10-10 with 10% down or a conventional with 20% down. Current down payment assistance programs means that for some 0% down is also possible. If you are wondering which loan program is right for you, start with how much of a down payment you are willing to make. Compare that with some homes for sale set at different price points. You can calculate the down payment needed by multiplying the decimal of the percentage needed.


If the purchase price is $500,000, then 10% can be represented by 0.10 and multiplied. 500,000 X 0.10 = 50,000.

Similarly, 3.5% would be 0.035. So, 500,000 X 0.035 = 17,500. Finally, 20% would be 0.20, multiplied = 100,000.

The following chart is for your reference and demonstrates four different possible down payment percentages and corresponding amounts for a range of purchase prices.

The 3.5% down payment is available through the CA FHA program. Not everyone will qualify and there are loan amount limits using this program that vary depending upon county.

Click here to learn what the Cal FHA income limits are.

Click here to learn what the Cal FHA sales price limits by county are.

The 80-10-10 program generally does not have restrictions, and it's just a matter of qualifying for a conventional mortgage. 80% of the purchase price is covered with a first loan, and a second covers another 10%. This is a very popular program, even for those who can pay 20% because it allows buyers to afford a more valuable home and can also enable the buyers to have more cash reserves for future needs or reinvesting purposes. Also note that the second loan amount has some flexibility and could cover 8, 9, 10, 11 or 12%.

For more information and to learn your personal mortgage options contact us.

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