LOAN TYPE
Conventional
The most common loan. Some programs start at 3 percent down for a first home. Under 20 percent down you pay mortgage insurance until you have enough equity to drop it.
MORTGAGES IN THE CENTRAL VALLEY
Central Valley Mortgage Guide: Rates, Down Payments and Loan Types
Ed Parcaut has spent his working life in mortgage and lending, and most of the questions he gets on the air come down to three things: what the rate really costs you, how much cash you actually need, and which loan fits your situation. Here is the plain version of all three for Modesto, Stockton and the towns around them.
RATES
Why nobody can tell you your rate over the radio.
A rate is not one number. It moves with the bond market day to day, and then it moves again for your credit score, your down payment, the loan type, whether the home is your residence or a rental, and how long you lock it. Two people buying the same house on the same afternoon can be quoted differently and both quotes can be fair.
That is why this page does not print a rate. Ask a lender for a written quote, ask what the rate is good for, and ask what it costs to lock it longer. On the show Ed talks about which direction rates have been moving and what that does to a payment, which is the part that matters to your budget.
DOWN PAYMENTS
How much cash it really takes.
Twenty percent is a habit, not a rule. Common programs start at nothing down for VA and USDA, 3 percent for some conventional loans and 3.5 percent for FHA. What twenty percent buys you is no monthly mortgage insurance and a smaller loan, so the question is which of those you need more right now.
Budget for more than the down payment: closing costs, an inspection, the first year of insurance and a cushion after you move in. Gift money from family is allowed on most programs with a letter. Down payment assistance exists in California and it is usually income limited, so ask before you decide you do not qualify.
LOAN TYPE
FHA
Backed by the federal housing administration, 3.5 percent down, and easier on credit history than conventional. Mortgage insurance usually stays for the life of the loan, so the monthly cost is worth comparing.
LOAN TYPE
VA
For eligible service members, veterans and some surviving spouses. No down payment required and no monthly mortgage insurance. There is a one time funding fee, waived for some borrowers.
LOAN TYPE
USDA
No down payment in areas the department of agriculture counts as rural. Parts of the Valley outside the city limits qualify and parts do not, so the address decides it.
LOAN TYPE
Jumbo
For loan amounts above the conforming limit in your county. Expect a larger down payment and a closer look at reserves and income.
LOAN TYPE
CalHFA and down payment help
California programs that lend a hand with the down payment or closing costs, usually with income limits and a homebuyer class. Worth asking about before you assume you cannot buy yet.
RUN YOUR OWN NUMBERS
Work out a monthly payment
Put in the price, what you plan to put down and the rate you have been quoted. Nothing is sent anywhere and nothing is saved. This is arithmetic, not a loan offer.
Estimated monthly payment
$3,634
- Loan amount
- $450,000
- Cash down
- $50,000
- Principal and interest
- $2,844
- Property taxes
- $458
- Home insurance
- $125
- Mortgage insurance, estimated
- $206
Taxes, insurance and mortgage insurance vary by property and by lender. With less than 20 percent down this adds mortgage insurance at an estimated 0.55 percent of the loan a year. Ask Ed for a real quote before you rely on any of it.
LOCAL NUMBERS
See what homes are doing here.
A payment only means something next to what homes cost on your side of the Valley. Both market pages carry the current listing figures for the county alongside California and the country.
BRING US YOUR QUESTION
Ask about your own situation.
Send the question you would ask a lender if the clock were not running. Ed answers listener questions on the show, and you can stay anonymous if you would rather.
Email the show