With California home prices rising rapidly, some home buyers are more than a little concerned that they won’t be able to meet soaring down payment demands. Unfortunately, higher prices are making it increasingly difficult for anyone to afford the prospect of home ownership. Having said that, how challenging is it to acquire a home in California? Is there any help out there for prospective buyers? What down payment assistance is available?
It’s unlikely that anyone will think to put off buying a home in California. Between surging home prices and values, rising rents and new mortgage industry changes, everything appears to be in favor of those that buy sometime in the very near future. Of course, with homes prices hitting a median of almost $1 million in San Francisco, and the fiasco surrounding Fannie Mae and Freddie Mac, it can be a lot easier said than done. Current market conditions do not favor the hesitant buyer.
What Can CA Home Buyers Do?
There is no question that buying a home in California could help buyers get in early and enjoy rising home equity. At the very least, they could avoid being held ransom by landlords who plan to increase rents. Interest rate increases also threaten to make matters worse by chipping away at affordability. If higher rates mean several hundred dollars a month more for the same house in six months from now, some are going to have to buy a cheaper home.
One of the most important and savvy moves right now is to get out there and get educated. Many may be procrastinating on making a purchase or even seriously looking at homes to buy because they incorrectly assume that they won’t qualify or can’t afford it.
Loans, Bridges & Owner Financing
There are actually a variety of tools available to CA home buyers to help them get into homes faster and enjoy more rewards. There are even low and no money down mortgages. This market is changing quickly, but don’t just assume you can’t buy until you’ve talked with at least several mortgage professionals.
Those interested in real estate investing should be encouraged to know that some hard money lenders report that they are making it even easier than ever to borrow.
Those that already own homes, and especially for those moving up or relocating to or within California, bridge and home equity loans might help to cross the gap and make it easier to get the best deal. Many homeowners and real estate investors are also offering various types of owner financing which can either help with out of pocket expenses or having to go to a bank for a loan at all. Those seeking jobs in the Golden State may even find employers more than happy to assist with relocation and housing costs, if they ask for it!
Down Payment Assistance
San Francisco Mayor Ed Lee recently announced the doubling of down payment assistance to $200,000, with those making over $100,000. The HUD’s website provides an extensive list of California counties willing to help new home buyers with down payments. The California Housing Finance Agency [CalHFA] provides a long list of approved mortgage lenders which can help first time home buyers get help too.
Both the City of San Diego and San Diego County, CA offer a combination of down payment programs, closing cost assistance grants, and special breaks on property taxes. All could well be worth checking out for those wanting to buy a home. However, it is up to you to become educated on what is available and what will work best for your particular situation.
