Los Angeles First Time Buyer | How much truth is in that 20% down statement?

My fiancé was just informed by one of her friends that in today’s market we are going to have to come up with 20% down at the 

table for whatever home we are looking to purchase. How much truth is in that 20% down statement? We would like something to start off with in the range of $250,000 - $300,000. $50,000 is A TON O CASH! Thanks Stephen!

Christopher

My Answer: $50K IS at TON O CASH!

No disrespect to your friend Christopher but in many situations, their statment is FALSE.There are at least 2 loan programs I’m aware of that require only 3-3.5% Down.

The loan programs are perfect for the Los Angeles First Time Buyerand they are  FHA and Home Path.

Here are 3 Excellent Points relating to these loans.

1. They are the most lenient with your Credit score

2. With FHA, the money for your down payment can be gifted from friends or family.

3. The seller can pay up to 3% of your closing cost.

There are a couple of challenges with FHA

1. They are strict about the condition of the property they will loan you money on (actually good for you)

2. Some sellers are hesitant to accept FHA offers (often bad advice from their agents, FHA loans is great and I’ve never NOT had AND FHA Buyer close! And an FHA loan is good for you because you’re buying a solid home)

3. If you are buying a Condo or Town Home the whole complex must be FHA approved. With Home Path, the property must be Home Path stream lined. In other words, you can’t just make “Home Path” offers on any home, condo or town home.

4. You will pay mortgage insurance.

My last 5 clients were all Los Angeles First Time Buyers and they did FHA loans.  I had them in escrow within 2-4 weeks and they closed in 30 days!

Points to keep in mind:

1. Find a mortgage broker that specializes in FHA and Home Path Loans. A good lender can make or save your deal, a bad one can break it!

2. Have a savvy Realtor that knows what types of properties qualify for FHA. Just like the lender, A good Agent can make the deal and a bad one can break it!

Here's a dorky yet informational Video Blog I put together on FHA Loans.