There are loan programs available for first time homebuyers that can enable you to purchase a home for little to no money down. They offer fixed low interest rates and the loans range from a down payment credit for residing in a high cost of living area, to offering a percentage of the purchase price to use towards down payment or closing costs, to a below market interest rate for teachers in eligible school districts.
CalHFA interest only 'Plus' offers up to 100% financing and allows borrowers to pay only the interest on the first five years of a 35-year term. After that, borrowers pay principal and interest at the same low fixed interest rate for the next 30 years. CalHFA also offers 30 and 40 year fixed mortgages with up to 100% financing and below market fixed interest rates. These programs were developed in response to the ARM loans that populated the mortgage lending climate in the last several years.
These types of loans require a minimum 620 credit score plus 3 years of tax returns as well as pay stubs, in order to process and qualify for them. You can also "layer' many of these loans, meaning you don't necessarily have to use just one, you might be eligible for many different loan options. Your mortgage broker can help you determine which ones are right for you.
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