PERALTAareaHOMES

This is designed as a quick overview of the different types of loans available.  For more information, please call 714-809-5787, or email  for a referral to a good lender.

LOW DOWN PAYMENT LOANS

FHA LOANS -  For borrowers who have a low down payment (3.5%) or less-than-perfect credit, an FHA loan might be a good fit for you. The down payment can often be a gift.  There will be additional closing costs, which the seller will sometimes pay.  The FHA (Federal Housing Administration) does not lend the money, instead it guarantees the loans.

The primary drawback to an FHA loan is that it is harder to get a seller to accept the offer.  (The higher the down payment, the more assured they feel that the loan will be approved.)  An FHA loan usually takes 45 days to close as opposed to the 30 day conventional timeline.  For loans above $417,000, two appraisals are required.  So an FHA buyer may need to bring in a higher offer to be attractive.  It is harder to buy a fixer-upper with an FHA loan because of stricter requirements regarding the health and safety of the occupant.  FHA borrowers must pay for mortgage insurance, so the cost of the loan can be more expensive in the long run.  

VA LOANS - available to almost all active duty and honorably discharged service members.  These loans can be 0% down, no mortgage insurance, and lower interest rates.  Like FHA, it can be a challenge to get the seller to accept your offer when there are multiple offers on a property.

The best strategy for purchasing a home with a low down payment is to make lots of offers.  Try not to get too emotionally involved with any home.  Just get your offer on the table and move on.  Something will eventually stick.    

CONVENTIONAL LOANS

Traditional loan programs require10-20% down, good credit, and lots of documentation.  They offer competitive interest rates.  Save your pay stubs, bank statements, and tax returns.  

CASH

If all other factors are equal, a cash offer usually trumps.  There is no worry over the appraisal or lender requirements.  A cash offer can close quickly.  Believe it or not, there are properties in Sage Canyon being purchased with cash.