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What Is The Best Mortgage For First-Time Homebuyers In California?

A first-time homebuyer and father in California pushes his son in a moving box in the living room of the house he purchased with the best loan that fit his financial situation.

Many first-time homebuyers in California may be unfamiliar with the various mortgages available. First-time homebuyers in California have many mortgage financing options available to them. There are numerous pros and cons to every kind of loan; working with a reputable mortgage lender, like JVM Lending, is the best way to determine which type of loan fits your unique financial situation.

WHAT IS THE BEST MORTGAGE FOR FIRST-TIME HOMEBUYERS IN CALIFORNIA?

The number of possible mortgage loans for first-time homebuyers in California can be overwhelming. The best mortgage loan for a first-time buyer in California could either be fixed or adjustable-rate. However, a conventional mortgage not supported by the government, or a government-endorsed program like the FHA loan, might be best depending on the property type. The homebuyer’s credit score and the established down payment amount could also influence the type of loan they choose.

ADJUSTABLE-RATE OR FIXED-RATE LOANS

Choosing a type of mortgage loan is one of the first decisions homebuyers need to decide when beginning to house hunt. Home loans can either have a fixed interest rate that doesn’t change or an adjustable rate that changes over time (typically once a year).

First-time homebuyers in California who expect to maintain their home loan for many years and favor payment stability might choose a fixed-rate mortgage. As long as they keep the loan, a fixed-rate mortgage will generally maintain the same interest rate.

An adjustable-rate mortgage (ARM) loan may be the preferred choice for first-time buyers in California looking for the lowest interest rate. ARM loans typically start at a lower rate than standard fixed loans. However, the rate is subject to change, so they have to be ready for that possibility.

FHA, VA, OR CONVENTIONAL

Californian homebuyers also have a choice between conventional or government-supported mortgage loan options.

  • Government-supported loans include FHA, VA, and USDA loans. FHA and VA are the primary mortgages backed by the government. While still originating in the private sector, these programs create a guarantee from the government.
  • A conventional loan is created (occasionally insured as well) exclusively in the private sector without government backing. First-time homebuyers in California who can afford a 20% or higher down payment frequently choose a conventional mortgage because it prevents them from paying mortgage insurance.

So then what is the best mortgage choice for first-time homebuyers in California? The options above are possibilities, but the best option depends on each individual’s unique situation.

WHAT IS THE BEST LOAN FOR YOU?

As a homebuyer, it is essential to choose the home loan best maintains your goals and priorities:

  • First-time homebuyers who are focused on getting the lowest rate and don’t plan to stay in their house long-term might choose an ARM loan.
  • First-time homebuyers who want to minimize monthly payments might choose a longer-term and fixed-rate loan.
  • First-time homebuyers who cannot qualify for a conventional loan or are unable to commit to a large down payment might choose a program supported by the government, like an FHA loan.

If you are first-time homebuyer in California and have any questions or are interested in seeing what types of mortgages you qualify for, contact JVM today – our team of mortgage experts are happy to help with your mortgage needs.

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Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167

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