One of the most common issues I run into with first time buyers is a lack of cash on hand. This tends to be an issue because most loans require at least 1 - 3.5% down, which in Humboldt County averages at least $2,000 - $8,000 (based on average sales prices). That might not sound too bad, but when you add in the closing costs for your loan, and your escrow, roughly $9,000 - $10,500, those numbers suddenly jump up to $10,000 - $20,000, again depending on your purchase price and loan type. The good news is that there are a few workarounds if your careful. You could always find a lender that has 0% down loans or downpayment assistance programs, but you have to be extremely careful because a lot of those programs are too good to be true. In my experience the majority of these programs substitute the need for a down payment with a secondary loan which usually has a higher interest rate. If you are comfortable with a higher monthly mortgage payment, then that route could be right for you. A more popular and risk adverse option would be to ask the seller for a close of escrow credit that would cover your closing costs, which means you'd only need to have your down payment in cash! Granted, you might have to make your purchase offer a little higher in order to get the seller to agree to giving you $7,000 - $10,000 cash at the close of escrow. If you would like more clarification on this process please do not hesitate to contact me!
