Question 1

How much do I need for a down payment on my first home?

Accepted Answer

With an FHA loan, you can put as little as 3.5% down. Conventional loans start at 3% down for first-time buyers. CalHFA programs can cover your entire down payment with assistance loans. For a $500,000 home, that means you could get in for as little as $15,000-$17,500 before closing costs.

Question 2

What credit score do I need to buy my first home?

Accepted Answer

FHA loans accept credit scores as low as 580 with 3.5% down (or 500 with 10% down). Conventional loans typically require 620+. If your score needs improvement, we can advise you on rapid credit score strategies that may boost your score in 30-90 days.

Question 3

What is the difference between pre-qualification and pre-approval?

Accepted Answer

Pre-qualification is a quick estimate of what you might qualify for based on self-reported information. Pre-approval involves a full credit check and document review, resulting in a letter that shows sellers you are a serious, qualified buyer. In competitive markets, pre-approval is essential.

Question 4

Can I use down payment assistance programs?

Accepted Answer

Yes. California offers several programs including CalHFA MyHome (up to 3.5% of purchase price) and ZIP (up to 3% zero-interest loan). Many cities also offer local assistance. These programs can be combined with FHA or conventional first mortgages.

Question 5

How much home can I afford?

Accepted Answer

A general guideline is that your total monthly housing costs should not exceed 28-33% of your gross monthly income. We factor in your debts, down payment, interest rates, property taxes, and insurance to give you a precise number during pre-qualification.

Question 6

What are closing costs and how much should I expect?

Accepted Answer

Closing costs typically range from 2-5% of the purchase price and include appraisal fees, title insurance, escrow fees, and lender fees. On a $500,000 home, expect $10,000-$25,000 in closing costs. Some of these can be negotiated with the seller or covered by lender credits.

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