First-time Home Buyer

First Time Homebuyers

Are you a first-time home buyer? Don’t know where to begin with and which first time homeowners loan to choose? Then continue reading as we provide you with complete details about:

  • First-time Home Buyer Loan programs
  • Income and Qualification Requirements
  • Best First-Time Home Buyer tips

EZ Fundings First-time Home buyer Guide ICON

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First-Time Home Buyer Programs in California

If you thought that living in the Golden State means saving tens of thousands of dollars for a down payment or perfect credit to become a homeowner, then you might want to think again. The good news is that the residents of California have numerous loan programs to achieve their dream of buying a home. Loan programs  include but are not limited to:

CalHFA Conventional Loan Program

Buying a home for the first time is easy with this loan program. It has a low down payment and a 30-year loan term. Requirements include:

  • A credit score of a minimum of 660
  • 43 percent or lower DTI (debt-to-income ratio)
  • First-time home buyer status
  • Completion of a home buyer education course
  • Down payment is as low as 3 percent of the home’s value.


CalPlus Conventional Loan Program

CalPlus conventional loans include the same features as the CalHFA program; however it has more additional benefits, which helps first-time home buyers to finance closing costs with a zero-interest loan.

However, this loan is offered in conjunction with the CalHFA ZIP (Zero Interest Program). Therefore, you can pay for the closing cost using ZIP as the borrower. This further enables you to get a loan equal to 2 percent or three percent of the mortgage amount.

The interest rate is zero percent, while payments through the life of the loan program are deferred. Requirements include:

  • A score of a minimum of 660
  • 43 percent or a lower debt to income ratio
  • First-time home buyer status
  • Home buyer educational course completion


FHA Loans

This is yet another way to finance your homeownership dream. Down payment is only 3.5 percent, and the credit score requirement is a minimum of 580. Hence, through this government loan program, even buyers with less than perfect credit can afford a home. To learn more about FHA loans, please click here

Eligibility for a Loan- Who Qualifies and What Income is recognized?

No lender will qualify a potential home buyer if they have a high risk of default. Therefore, there is a criterion determining the eligibility for a loan in terms of who qualifies and what income is recognized by the lenders.

Mortgage lenders are likely to accept those borrowers who:

  • Are employed and receiving W2s that show at least 2 years work history (full or part-time)
  • Are self-employed (have filed Schedule C (receiving 1099) or own a corporation) but they must show 2 year taxes
  • Receive social security income, or pension
  • Receive child support and alimony. However, the borrower must prove that they will continue to receive it for the next three years.
  • Can show taxes on capital gains for over the last two consecutive tax years


First Time Home Buyer Tips

Here are some tips from our experts to make home-buying simple and avoid possible mistakes:

Get a Pre-Approval

First things first, get a mortgage pre-approval. It gives you peace of mind and helps increase your chances of securing your dream home. A pre-approval letter:

  • Shows how much you can borrow or what you can afford
  • Guides your budget
  • Helps tailor your search for homes within your price range
  • Shows the sellers that you are serious about the purchase

When you get a pre-approval letter, make sure it is fully underwritten to avoid potential issues later. This letter assures the seller that your information is verified which further increases your chances of securing the purchase.

Start Saving Money Early for Closing Costs and Moving-In Expenses

Make sure to start saving early. You can do this by slashing unnecessary or impulsive expenditures and creating a budget to help reach your target. This is much needed because studies show that it takes nearly 6.5 years for an average first-time home buyer in America to save for a 20 percent down payment. So, we say start your savings in advance. Cut back on expenses and put those funds in a brokerage or high-yield savings account.

Strengthen Credit

A good credit score can provide more financing choices and lower interest rates or premiums. So, if you want that, focus on strengthening your credit from today. Lenders want to see stable credit. Therefore, avoid racking up credit card debt or opening new accounts. Review your credit reports for inaccuracies, errors, or wrong information. Get them fixed to restore your credit and ensure you have the ideal score to qualify for the loan program.

Avoid Additional Liabilities

If you are vested in buying your first home, avoid incurring additional liabilities like purchasing a car or taking out a personal loan. Stay focused. Don’t be tempted. All of this can wait till you become a first-time home buyer.

Choose an Experienced Lender

Work with a team that has the experience and expertise in working with first-time home buyers and can provide you with quality guidance and step-by-step assistance in achieving your goal.

Get a Real Estate Agent

Though it is possible to buy a home solo, it is not recommended when it is your first time. Work with a seasoned local real estate agent who can help vet neighborhoods, schedule home tours, negotiate, draw up contracts, etc.

So, if you wish to enjoy a hassle-free home buying process, contact us. We can provide you quality assistance from start to finish. In addition to many first-time home buyer loan programs there are also numerous down payment assistance programs. We can help you navigate through them too. These can significantly minimize the up-front cost of purchasing a home.

The Impact of Homeownership on Personal Finances

For many people and families, becoming homeowners marks an important turning point. It not only fosters a sense of security and stability, but it also significantly affects one’s own economics. One of the biggest financial expenditures a person will make in their lifetime is sometimes purchasing a home. This article will examine the impact of …

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The Power of a Pre-Approval: Why You Need One Before Buying a Home

The power of a pre-approval is immense, especially if you’re planning on purchasing a home soon. With today’s housing market being so challenging, it’s essential to have a solid grasp on your homebuying budget. The key to staying ahead of the competition is to get pre-approved. A pre-approval is a process where a lender looks …

The Power of a Pre-Approval: Why You Need One Before Buying a Home Read More »

Big Changes Coming to Conventional Mortgages Soon

If you’re planning to apply for a conventional mortgage for your home purchase or refinance, you should be aware of some changes that are coming your way. As of May, the Federal Housing Finance Agency has updated its pricing framework, which will affect the upfront fees for conventional loans. Closing costs are inevitable when it comes …

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Homeownership isn’t just a “Dream”…for All

If you’re a first-time homebuyer in California and missed out on the CalHFA Dream For All program, don’t worry. There are other down payment assistance programs available to help you achieve your homeownership dreams.  MyHome Assistance Program   One option is the MyHome Assistance Program offered by CalHFA. The MyHome program provides first-time homebuyers with a …

Homeownership isn’t just a “Dream”…for All Read More »

Home Buying Power and Changing Mortgage Rates

As a potential homebuyer, it’s crucial to understand how even a small shift in mortgage rates can significantly affect your home buying power and monthly payments. The 30-year fixed mortgage rate has been fluctuating between 6% and 7% this year. Let’s explore the connection between buying power and changing rates, the benefits of homeownership, and the …

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California Dream for All Program

California Dream for All: A Path to Homeownership for First-Time Homebuyers The California Dream for All program is a state-sponsored initiative aimed at assisting low- and moderate-income first-time homebuyers in achieving homeownership by providing shared-appreciation loans for down payment assistance. Administered by the California Housing Finance Agency (CalHFA), this program has been introduced under Senate …

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