First Time Home Buyer Loans
Your options explained. Your questions answered.
First Time Home Buyer Loans in San Diego
If you’re looking to buy a home, perhaps you’ve asked one of these questions: “Where is the best place to get a loan? What is the right loan for me? How can I get the best rate possible?” Buying a home for the first time can be stressful and confusing. But it doesn’t have to be. If you’re looking for first-time home buyer loans in San Diego County, you have several options.
First Time Home Buying: Loans to Know
At National Home Loans, we’re known for being one of San Diego’s most helpful guides for first-time home buyers. That’s why we won’t just run through some of the more common loans for first timers. We’ll also answer the most common questions that hopeful homeowners like you are asking.
And when you want a truly stress-free, cost-effective solution, we’re ready to hunt down the best loan and terms for you ourselves. Still, knowledge is power. Here are the three most popular San Diego first time home buyer loans you should be aware of in 2020:
- 01. Conventional Loans
- 02. FHA Loans
- 03. VA Loans
- 04. Other Programs
Conventional loans are backed by government-sponsored home mortgage companies Fannie Mae or Freddie Mac. These require as low as 3% down. Conventional loans are good for those with strong credit.Learn More
These loans are insured by the Federal Housing Administration. They’re great for first-time home buyers with lower credit scores or less money saved for a down payment. You generally will be able to secure a loan at 3.5% down with a credit score as low as 580.Learn More
If you are associated with the military, a VA loan gives you benefits that no other loan can offer. Backed by the U.S. Department of Veterans Affairs, it allows no down payment for military personnel, veterans and their families. Typically, they offer lower interest rates than other loan programs.Learn More
Besides these loans, San Diegans can avail of other programs such as loans specific to seniors and home loans for the self-employed. Whatever your unique circumstance, there is a loan that will fit your goals and needs. It can be confusing and time-consuming to wade through all the options, so chat with us and we’ll do the hard work of finding the right loan for you! Or browse some common first-time home buying questions and answers below.
First-Time Home Buyer FAQs
What is a mortgage, anyway?
Did you know that only about 10% of buyers purchase homes with all cash?
Most people need to borrow at least some of the money to buy a new home. This happens with a special type of loan called a mortgage. Some states refer to mortgages as deeds of trust.
How much down payment do I need for a house?
The average down payment for first time home buyers is only 6%. On a $250,000 home purchase, that would be just $15,000. Some loan programs will even let you buy with even less than 6% down.
This covers how much you may need, but how much should you put down? It depends on your income, how much you currently have saved, how expensive the home is, and what your home buying goals are.
Generally speaking, here are the pros and cons of bigger versus smaller down payments:
Bigger down payment = lower interest rate
Bigger down payment = lower monthly payment
Smaller down payment = stop paying rent, buy a home sooner
Smaller down payment = start building equity faster
If you need specific guidance, we’re here to help!
Why do people say you need 20% down?
If average down payments are well under 20%, why do some people say this is the minimum? That’s because 20% down gets you out of paying for something called “mortgage insurance.”
Mortgage insurance is an extra charge on your monthly mortgage bill, and this can sometimes be expensive. It can sometimes go over $100 per month. However, there are also benefits to paying mortgage insurance if it gets you in a home sooner. It’s another cost versus benefit item to consider as you put together your home buying budget.
Do I have to pay the down payment out of pocket?
Many mortgage programs require a down payment of some kind. On paper, this is money you put toward the home purchase out of your own pocket. But there are ways to avoid that and still come up with the cash required to get a loan.
What kind of home can I afford?
As you might expect, this is an important question to answer early on! It’s so important that we have a separate How Much Can You Afford guide, plus a Home Affordability Calculator. Check out these resources!
What credit score do I need as a first-time home buyer?
Your credit score makes a big difference when you buy a house. It affects your loan options, mortgage, rate, and home buying budget. This can sometimes be a concern for first time home buyers who might not have “excellent” credit. But those with fair to good credit scores still have options.
Here are the typical credit score requirements for the most popular first time home buyer programs:
Conventional loan — 620+
FHA loan — 580+
VA loan — 620+
USDA loan — 640+
It becomes more difficult to find mortgage financing in the below-620 range. Technically FHA loans are available with a credit score as low as 500, but only if you can make at least a 10% down payment.
Start checking your credit well before you plan to buy a house — at least a year in advance if possible. This will give you time to flag errors on your report, solve them, and even work on raising your score if that’s necessary to get a loan.
How do I know if I’m ready to buy a house?
If you want to know whether you’re ready to buy a house, ask yourself four questions: 1) Do I have a steady job and reliable income?; 2) Do I have enough money saved for the down payment AND closing costs?; 3) Is my credit history reasonably strong?; 4) Do I plan to stay in the home for at least five years? There’s a lot more to each of these questions, of course, but the answers should give you a general feel for your home buying readiness.
What should I do next, or what’s the best way to get started?
No matter where you are in the home buying process, having a mortgage broker like National Home Loans in your corner can save you time, money, and energy. We can get the right mortgage for a first-time home buyer like yourself at the best rate possible. Request rates or contact us to see how we can help!
Why Choose National Home Loans
You can get real estate financing elsewhere. Why does National Home Loans beat the rest?
Get concierge-level service from pre-approval to closing while saving money. Stress-free is our specialty.
When thinking about home loans, it’s always cheaper to have a mortgage broker who’s working for you.
Just the Right Fit
We’ll find the right loan program and best terms for you. It’s a completely customized experience.
We have access to 100+ lenders, giving you the most options without any extra work.
Personal & Local
We offer a local alternative to the “big bank” feel that lenders provide. We’ll guide you every step.
Work with top San Diego mortgage broker and business development expert John Giannattasio.
Rated one of the top 100 mortgage brokers in the nation
by the Scotsman Guide
I shopped around a bit for a broker, and was referred to John by a coworker. He was by far the most personable, professional, and proactive broker that I interacted with. He promised me that he was doing everything he could to protect my family's money and get us into a house that we love, and he did. The bottom line is he got us our desired results, he offered great advice, and he earned my trust and confidence. I would recommend his services to anyone looking for a knowledgeable and passionate mortgage broker.
Have been working with John for a couple months now; he is very patient and understands our needs as first time home buyers. John has been amazing and answers all our questions, I think we have found our long time broker. He has the clients best interest in mind which is very refreshing. A++
John is great at what he does, especially for first time homebuyers. He is willing to go the extra mile for his clients and will explain exactly what he's doing along the way. I'm so glad we were able to work with him and I highly recommend him.
Beyond grateful to have been referred to John G. right after getting our offer accepted on a home. We would not have been able to do it without him. He secured us a great rate, which was a game changer in our decision to purchase. It was our first home purchase, and he helped us navigate every single thing, and was extremely responsive and available to chat when we needed him. The entire escrow process was smoother and quicker than we could have ever hoped for. He was a pleasure to work with, and we hope to continue to work with him in the future.
Helping You Find Your Way Home.
Ready for a stress-free mortgage experience? Request rates or contact John today!