March 20th, 2023
Getting into the world of real estate, while exciting, can be a scary and overwhelming step. If you’re on the mission of buying your first home, we understand the pressure, nerves and uncertainty you may be feeling. So, we’re here to help.
We want to teach you all about handling the real estate process as a first-time buyer in California. So, we’ll explain how you can qualify and get financing, which benefits you’ll reap as a first-time home buyer and how to make the process as smooth as possible. Let’s dive in and make your home-buying experience a stress-free adventure.
Before discussing qualifications for first-time buyers in California, let’s explain who a first-time buyer actually is. According to the California Housing Finance Agency (CalHFA), a first-time homebuyer is a person who hasn’t owned and occupied a principal residence in three years prior to the purchase of a home.
This means that even if you’ve owned property before, as long as you haven’t lived in that property as your primary residence in the past three years, you may still qualify as a first-time buyer. And in case you’re purchasing a home with a spouse or partner, both parties must meet the first-time buyer qualifications to be eligible for certain programs and benefits.
Now that you have a general idea of who is considered a first-time buyer let’s explore the necessary requirements for a first-time home buyer in California.
Although, at first glance, it may seem like you’re not in an enviable position when buying your first home, there are actually quite a few advantages to being a first-time buyer. If you don’t believe us, here are the main benefits you’ll get.
Great news! Not only does California have a first-time buyer program, but it also has several other programs and benefits aimed at helping first-time buyers achieve homeownership.
One of the more popular programs is the California Housing Finance Agency (CalHFA) program. It provides financing and down payment assistance to eligible first-time buyers. The program offers a variety of loan options, including fixed-rate and adjustable-rate mortgages, and can provide up to 5% of the loan amount in down payment assistance.
In addition to CalHFA, there are several other first-time buyer programs available in California. These include the MyHome Assistance Program, which offers up to 3.5% of the home purchase price in down payment assistance, and the Mortgage Credit Certificate (MCC) Program, which provides eligible first-time buyers with a tax credit of up to 20% of the mortgage interest paid each year.
So, it’s down to you to find a program that works for you and that you’re eligible for. Which one will it be?
So, there are various California first time home buyer programs you can go for depending on your situation, but how do you apply for them? These are some general guidelines for applying for first-time home buyer programs in California.
Even when you’re getting assistance from one of the first-time buyer programs, going through the escrow process is recommended. This means that you need to understand how beneficial this process is and meet the California escrow requirements.
During escrow, a neutral third party holds onto funds and documents until the end of the real estate transaction. This ensures that both the buyer and seller fulfill their obligations before the transaction is complete.
The escrow company collects and holds onto funds, such as the buyer's down payment and closing costs, until all conditions of the sale have been met. They also review and prepare documents, such as the purchase agreement and deed, to ensure they are complete and accurate.
Once all conditions have been met, the escrow company will release the funds and documents to the appropriate parties, and the transaction will be complete. This process might be a little more complex and there are more escrow terms to get familiar with, but knowing the basics is a good starting point.
Whether you’re buying your first or tenth home, escrow is just as important. Working with a good escrow company will help make the process simpler than ever and make your home-buying experience less stressful. Lightspeed Escrow is here to handle the escrow process from start to finish!
We’re escrow experts with years of experience and our goal is to help out clients navigate any real estate translation with ease. Count on us to help you successfully and quickly close your first ever home in California – get in touch today!