Have you been putting off buying a home for years? Often one of the biggest hurdles is saving up for the down payment. 20% or even 15% is frequently a huge chunk of change, and with a high cost of living in California in general, and student debt, and wedding costs, and on and on … it can feel almost impossible to save enough money for a down payment.
Good news: there are government programs that can help!
California has some great programs set up for first time homebuyers. One of them is called the California’s Homebuyer’s Downpayment Assistance Program (CHDAP). It offers a deferred-payment subordinate loan for 3% of the purchase price or appraised value of the house, whichever is lower. This loan can be used for the down payment and/or closing costs. Find out more here.
Educators: listen up!
There’s also a government program that helps Californian teachers purchase homes. Eligible teachers, administrators, classified employees and staff members working in certain high priority schools may receive a deferred-payment junior loan of us to $7,500 or 3% of the sales price. Or if the home is in a CalHFA-defined high cost area, the loan could be for up to $15,000 or 3% of the sale price. This loan can only be used for the down payment. For more info click here.
Tip: buy a less flashy home, make extra mortgage payments
It can be incredibly tempting to buy a home that you can just barely afford. Perhaps you calculate the mortgage payment and it’s roughly equivalent to the rent payment you’re currently making each month. But you’ve got to realize:
Home ownership is a lot more complicated than just mailing in a check for your mortgage payment each month.
There are hidden costs—maintenance, repairs, more rooms to furnish and decorate, more heating and cooling charge fluctuations, … the list goes on and on.
Instead, find a home that you can reasonably afford to pay the mortgage payment on each month. Then either save the “extra” money for a rainy day or retirement, or use it to pay off more of the principle each month. Even just making one extra mortgage payment per year can make a tremendous difference over the term of your loan.
Got questions? Good! Most first time home buyers are full of questions.
That’s a good thing – that means you’re paying attention. Buying a home is a huge financial decision and [business] is here to help you every step of the way. We’ve helped hundreds of first time homebuyers through this exciting process, and we’re happy to answer any questions you have. Feel free to give us a call at [phone] or email us at [email]. Happy home-buying!