Blog Layout

How to Win a Bidding War in San Jose's Seller's Market Going Into 2021

November 16, 2020

Great Tips For San Jose Home Buyers & First Time Home Buyers!

The pandemic has changed the world of real estate and the way homes are sold in Silicon Valley and Northern California.  Usually during this time of year homes sell at a much slower rate than any other time of the year.  However, because of Covid, all of that has changed. Homes are still selling at a fast rate with only a few days on the market.  Reason is; there is a very low supply of real estate inventory in today’s market.  In fact, the inventory in the San Jose Bay area is about 40% lower than previous years.  There are more home buyers searching for homes than there are homes for sale.  Many ask why would someone want to move or buy a home during a pandemic?  The answer is quite simple.  Home buyers and families who live in condos, town homes, or apartments need more space because of the stay in place order.  Many professionals and high tech home buyers are looking for larger homes with more space outside of the hustle and bustle of the busy city. 


There's a high demand for homes with a bigger back yard so that families with children and pets will have more space to stretch their legs during a pandemic and a stay in place order.  Also, since the shutdown many employees are able to work from home, and are even allowed to continue working from home after the pandemic is over.  So this allows them to live and work outside of commuting distances from the office.  Many companies are quickly realizing that allowing their employees to work from home helps to significantly reduce their operating expenses.  This has allowed many businesses to stay afloat during these uncertain times. Because families are spending more time at home many of these families are needing a home with much larger square footage and an office for work.


Interest rates are also a big factor.  Mortgage rates are still historically low and currently you can get a 30 year fixed rate below 3%. This is another reason why there is such high demand for home ownership not just in San Jose but throughout California and the United States. 


Because of the high demand to buy real estate in Northern California, current historically low interest rates, and low inventory, buyers are forced to compete to buy homes for sale in San Jose and it's surrounding suburbs.  Homes are on the market for a minimum amount of time, in some markets such as the Los Altos, San Mateo and Danville Markets houses are quickly going into a sale pending status within 7-14 days or less.  Many home buyers have actually been pushed out of the real estate market place because of so much competition, and are planning to buy a house in 2021. 


In such a competitive environment it is so important to have a real estate expert who has experience in winning bidding wars.   Winning your dream home under the current environment  takes planning, timing, a good strategy, good PR on the realtors end, and a strong offer.


Many of these required steps are actually done before you even begin your home search or find your dream home.  The first step in the home buying process actually begins with your lender.  It’s important that you work with someone who’s reliable and has the best loan and terms to support making a strong offer.  Home owners and listing agents tend to favor Conventional Loans over FHA Loans.  If you have the option to choose between the two loan products, and the terms are in your favor your loan officer may recommend that you receive a loan pre approval with a Conventional Loan.


Of course putting down a large down payment and earnest money deposit shows the seller that you are motivated and serious about the purchase.  A large down payment with proof of funds showing some extra reserves on hand may help the seller feel more comfortable choosing your offer over others just in case the appraisal from the lender doesn’t cover your increased offer amount. Before we go any further with discussing the offer let's go back a little.  Timing is actually the next step to winning a bidding war after your financing and loan approval is complete.  Many home buyers do their home searching on their days off which is usually during the weekends and sometimes Fridays.  Sellers generally choose these days as well in order to allow open houses and private viewings of their properties.  So it’s safe to say that a great majority of home buyers are doing their viewings during these days of the week. 


This creates a system, where offers will usually flow into the sellers agent’s email on Mondays and Tuesdays because of all the weekend traffic and open houses.  This system works well for sellers because it allows buyers to see the home all at or around the same time, which creates a channel for offers to flow in around the same time as well.  This creates a climate for bidding wars.  Yikes!  Although this system is good for sellers, it's not so good for home buyers. So, buyers seeking to purchase a home are advised to do all of their viewings tactfully, preferably on days of the week when other buyers aren't looking and without delay, immediately submitting their offer on any home they're interested in buying.


Communication is essential.  It is a good idea for the buyer’s agent to begin communication with the listing agent before viewing the property to know it’s offer status.  There’s no need of knowingly running into an ambush; this will prevent that from happening.  If the property already has multiple offers and you have not seen it, it's probably best to just move on to the next home.  Tour properties that are well within and below your maximum price range.  That way you will have some wiggle room to negotiate and increase your offer amount if other offers happen to come in after you have submitted yours.  Your agent should be in constant communication with the listing agent because things are so fluid these days and offer statuses are constantly changing.


Hopefully your agent or real estate broker is very cordial, friendly and has a great relationship with the listing agent, even if they don’t know each other. This helps keep the line of communication open and in your favor.


Now it's time to talk about the terms of your offer but before we go into terms keep in mind that it will more than likely be the price that will determine if you get your dream home or not. These tips can be very helpful but remember that the price that will be the most important if not the main factor the seller will use in determining who’s offer to go with.  Don’t be afraid to cushion your offer with a few hundred dollars.  Never let your offer number end in the 000's!  You could be surprised and disappointed to discover that you lost your dream home over a lousy $300 if you allow your offer to end in 000’s. A good example is $2,890,300 is a better offer than $2,890,000.


Every home seller wants a short and easy escrow.  Knowing this will be helpful when writing your offer.  Try to make your escrow to be as simple and as short as possible. Of course you should check with your loan officer before writing your offer to see how short of an escrow you can have.  After all your lender will need time to get your loan appraised, fully approved, and dot all the i’s and cross all the t’s.  Be sure to be in constant contact with your lender, provide any requested documents and review and sign any requested forms in a timely manner.  Title and escrow companies are required by law to be neutral parties to every transaction.  Allowing the seller to choose the title and escrow company should be ok, it can save time and make all the difference between you receiving a multiple counter offer or getting a fully accepted offer back from the listing agent during a bidding war.


Although the earnest money deposit amount is not a major important factor to some sellers as long as it meets the threshold; it does help to show the buyer's willingness and level of motivation.  Keep in mind that every contract allows buyers to have an inspection period to inspect the home and allows home and pest inspectors to come in too.  A home inspection is very important and highly advised, even for newer homes.  In California the inspection period is generally 17 days, however having the ability to complete all of your inspections in a shorter time frame helps to strengthen your offer.


Getting a home warranty to help cover appliances is also advised and can come in good use in case something breaks down and needs repair after you have moved in.  Many home warranty companies offer these services for as little as $500.  Which could save you a lot of money down the road.  Some buyers ask the seller to help or even pay for the home warranty. However, if after checking with the listing agent, or broker you discover that there are multiple offers on the property that you are interested in or perhaps there aren’t any multiple offers but you're searching in a real estate market that is hot and prone to have bidding wars such as the Los Altos Hills, or San Jose then it's probably best that you absorb the fee.  These are just only a few ideas to mention...


Purchasing a home should be a wonderful and pleasurable experience especially if you are a first time home buyer.  Getting your dream home during a pandemic can be nerve racking and very challenging because of the low inventory out there and fierce competition.  This is why it is so important that you have an experienced realtor like Capri Ndikum at Citi One Realty to help you navigate through the home buying process, bidding wars, and land you your dream home.  Capri who doubles as a realtor and real estate broker has 21 years of real estate experience through changing markets and a major recession. She also has the know how to help you succeed and win! 



What's my home's worth? Looking for a top realtor in San Jose? Capri Ndikum is a top San Jose Real Estate agent & broker/owner of Citi One Realty located in San Jose, CA with over 21 years of real estate experience. The American Institute of Real Estate Professionals listed Capri Ndikum as the 10 Best Real Estate Agents in California.








San Jose Real Estate Blog

Benefits of Buying a Home

By capri.sellsproperties • March 8, 2023
Top Reasons to Buy a Home

Selling Your Home During a Slow Real Estate Market or Recession?

By capri.sellsproperties • February 22, 2023
My House Didn't Sell So What’s Next?

Who really is a real estate broker?

By Capri Ndikum • December 17, 2022
San Jose Broker

Make Repairs or Just Sell As-Is?

By Capri Ndikum • July 1, 2022
Capri sells homes in the San Jose Bay Area, Stockton, Tracy, Central Valley and Sacramento as the broker and owner of Citi One Realty . Specializing in home remodeling, staging, and selling of homes for over 21 years. Make repairs, or just sell it as-is? This is the question that is on the minds of many homeowners in today's market. Within the past few years home buyers have become more attracted to homes that are in a turn key position, and ready to move into. Because of today's current events, inflation and rising interest rates home owners will need to make their homes more competitive in presentation and price in order to attract more potential home buyers. This may sound like a daunting task, but with the right real estate professional to guide you through the process its pretty simple and easy. In today's market it doesn't matter where you live from San Jose Evergreen, Silver Creek, Willow Glen, The Almaden Valley, Saratoga, Los Altos, Cambrian, Tracy or the Stockton real estate market. Following these tried and tested steps will help you achieve a faster sale and higher sales price. While a few sellers decide to not update or stage their home; many homeowners do for a faster sale, so it's important in these markets to get your home ready in order to beat your competition. Not doing anything at all example, painting, cleaning, or listing your property above market value will only help your neighbor's home sell faster. You don't need to spend a lot of money to get your home ready, but keep in mind that first impression is everything; and home buyers whether they know this or not are looking for an "emotional" experience when they walk into your home. Knowing how to prepare your home in order to trigger all the right emotions of a home buyer is key, and this process begins several weeks or even months before show time! The majority of the buyers in your market will see your home right when it's listed. What this means is that homes only get a small 14 day window to receive the best and highest offers; so it's imperative that you get it right from the very beginning. It's important to have the right set of professional eyes to walk through your home with you and show you what work is needed, and what's not. We'll walk through your home with you and place you on the right path so that you reach your goals. I've always said that we prepare for big events like a special birthday party to show off our homes to our guests, we prepare our homes for holiday celebrations, we even spend months to prepare for a wedding celebration. Why not invest a little time and resources to prepare for what is usually the largest sale or investment of our lives?  When done correctly, repairs, possible minor remodeling IF needed, and some staging will help your home to sell faster, at a higher price, and make the process of selling of your home more seamless and pleasant. That's of course only if it's priced right! Reach out to us to receive your free no obligation home assessment to make sure your home is correctly positioned and ready to receive the most money possible! We're here to help. Click here to... Give us a cal l! 408-828-1809/925-434-8684

Top San Jose Realtor Discusses Inflation and How it affects Buyers and Sellers in Today's Real Estate Market

By capri.sellsproperties • June 3, 2022
What Does Higher Interest Rates Mean for Buyers and Sellers?

Is San Jose in a Strong Seller's Market?

By Capri Ndikum - San Jose Realtor • March 15, 2021
San Jose’s single family housing market suggests that San Jose is in a strong sellers market.

Getting Your Home Ready to Sell During & After the Holidays

By capri.sellsproperties • December 3, 2020
Exciting Tips on Selling Your San Jose Home Fast!

Real Estate Opportunity Zones in Residential San Jose

By capri.sellsproperties • August 30, 2020
Opportunity zones have become a very lucrative and popular investment tool for investors all over the country because it allows investors to defer their capital gains tax. They are becoming more and more popular in San Jose, California. Qualified Opportunity funds have attracted an estimated $75 billion dollars in new capital in just two years and are expected to attract much more. Before we go into more detail, let's go over the big question that’s buzzing around. What are Opportunity Zones? How can they benefit a new or a savvy investor, or help the community? Created by a bipartisan Congress through The 2017 Jobs act this new investment tool is a unique opportunity that helps and gives investors an incentive to invest their capital into low income neighborhoods and areas that usually are overlooked and even forgotten. The program allows investors to defer their capital gains and even avoid paying capital gains on their new investments if their investments are placed into a Qualified Opportunity Fund, and invested in a census tract that is labeled as an Opportunity Zone. Let’s go into more detail. An OZ is like a 1031 on steroids. With a 1031 exchange investors have only 6 months to reinvest their capital from the sale of real estate into a like kind property in order to avoid paying tax on their capital gains. However, with an OZ the capital can come from the sale of stock, a business, or real estate and it doesn’t have to be reinvested into a like kind property as long as it is reinvested into an OZ within 6 months from the sale. This program does have requirements in order to receive the tax benefit. One of the requirements is that the capital has to be invested into a neighborhood that has been zoned by the governor as an Opportunity Zone. There are 36,000 census tracts across the country, out of them 25% have been designated as Opportunity Zones. When the bill was created Congress did not want to have to decide which areas would be labeled an OZ, so they decided to give the governors of each state that responsibility in order to make sure that the intent of the bill is fulfilled since local governors and mayors know their communities and neighborhoods more than anyone else. This program works best when local mayors and the governor work with the community, philanthropy and developers, and when local laws, development and permit policies are created and in line to support Opportunity Zones. This legislation allows the nation's private capital to go directly into the areas and communities that need it most. Creating new jobs and opportunities for so many people that have not seen any of the recovery and growth that has been mentioned and talked about on the news since the recession of 2008. In fact most of the recovery that has occurred in the nation comes from three states: New York, California and Florida and areas within these states that are medium to high income. HOW TO CREATE A QUALIFIED OPPORTUNITY FUND You can start your own Qualified Opportunity Fund if you have a Corp, Partnership, or LLC, however because of the required funds that will have to be invested into your new building or investment it may be more lucrative and make better since to just find an Opportunity fund to invest your capital into since they have more experience and knowledge with OZ’s. 100% of the price of the investment will need to be invested into the building for improvements minus the cost of the land within 30 months of the purchase. In order to know the land value you can always check with the local property tax assessor in order to find out what the recent assessed value of the land is. So for an example if you purchase a property for $1 million dollars and the land value is $200,000 you would need to make $800,000 in improvements. In order to make such a substantial improvement into some properties you would likely need to demolish and build a whole new building. Today there are 30,000,000 Americans living in low income neighborhoods. Many of these low income neighborhoods around the country are getting a new makeover, and communities are seeing hope with this new program because developers are coming in and developing entire blocks with beautiful condominiums, town homes, hotels, businesses, and retail facilities, and medical and office facilities. Finally a straight line has been drawn that connects these economically distressed communities with potentially over a trillion dollars of US capital investments. These communities are also receiving new employment opportunities with all the new development that is happening because of the OZ. The big question is why would investors want to invest their capital into areas that have been known in the past as high risk? What exactly is the benefit for the investor? Those investors that are pulling their capital from the stock market today during the Covid-19 era will have to pay tax on the capital gains of the stock, and during the Covid trillions of capital has been sold and need to be reinvested somehow by these investors. Many are looking at real estate because of its lucrativeness. Especially in areas like San Jose where you can enjoy rent and future equity from your new investment. If you invest into an OZ for 5 years you get to defer your capital gains tax, and only have to pay tax on 90% of your invested capital gains (ex. The money you pulled from your stock), and you don’t even have to pay it until the year 2026. Those who hold their investment in an OZ for an extra 2 years, a total of 7 years get to only pay 85% of their original capital gain when they decide to sell it. The big benefit is here: if you keep your OZ investment for a total of 10 years and you make all the required improvements which we discussed earlier, and are fully compliant You will pay NO CAPITAL GAINS when you decide to sell. So the way this works is let's say you sell some stock and receive 1 million in capital gains. You then purchase a building for 1 million dollars with the capital gains you received from the sale of your stock. You hold the new investment for 10 years (and made the required improvements) and decide to sell. The property has appreciated by 2 million dollars, so you get 3 million dollars from the sale. You will only have to pay capital gains tax for the original money you invested into the property since you never paid any capital gains on that money. Your original invested capital was only 1 million, so you will pay tax only on 85% of the original $1 million which means you’ll pay taxes on $850,000. So you receive $3 million from the sale but you will only pay capital gains tax for $850,000 of it. That’s sweet! WHERE TO FIND OPPORTUNITY ZONES IN SAN JOSE? To find out exactly where real estate opportunity zones are in residential San Jose you can find out by looking online as the state provides a map of all approved census tracts. Several census tracts in downtown San Jose have been selected as Opportunity Zones, and many have the potential to become very lucrative investments because of Google’s planned 60 acre campus to be built nearby, PLUS more new and upcoming plans are being filed by developers. In fact there are already Qualified Opportunity Funds that are working with the City of San Jose’s planning department to develop some of downtown San Jose Opportunity Zones. There are also some areas selected near Monterey Rd and Curtner Ave, Alma Ave, from Monterey Rd and Old Tully Rd. Also near HWY 680 and the McGlaughlin exit, and the Story Rd exit off HWY 101. PROS AND CONS We’ve gone over many of the pros in investing into this unique and new government incentive. The program was created in 2017 but didn’t start getting a lot of traction until 2018. While there are several benefits noted by investors, some investors feel that because they have to invest the actual value of the property into the property in order to capture their deferred benefit, they would likely need to increase rents in order to recapture expenses. Which would drive out the actual people that the program is designed to help, and they don’t want to push anyone out of the community. So it is believed that this criteria needs to be adjusted. WHO CAN HAVE A QUALIFIED OPPORTUNITY FUND? Anyone can have a Qualified Opportunity Fund. You will need to create an LLC (if using an LLC it must be treated as a Corp for tax purposes), Partnership, or Corp for your Qualified Opportunity Fund, unless you already have a qualifying entity you would like to designate as your QOF. The next step is to self certify your LLC, PARTNERSHIP, OR CORP as a Qualified Opportunity Fund using the IRS tax form 8996 . This will be done when you file your income taxes, so your accountant can attach form 8996 to your tax returns. Keep in mind that 90% of your QOF assets must be in an Opportunity Zone. There are many requirements that need to be met so that you don’t get penalized and miss out on capturing your deferred benefit. Since for the time being your QOF is self governed it is so important that you have a team of professionals in place to help you. I believe you'll need a “team of four to keep it "FAAR ”! Fund manager, Attorney, Accountant, Real Estate Agent. 1.) Fund Manager will make sure that all the T’s are crossed and the I's are dotted with your Qualified Opportunity Fund so that your fund stays in compliance. It’s very important that they are closely involved. 2.) Attorney to keep you current as new rules and regulations roll out. 3.) Accountant to make sure your fund properly self certifies and does everything to be compliant and ensures that your savings are being allocated and used properly. 4.) You'll need a Real Estate Agent familiar with Opportunity Zones in San Jose to make sure that you're making good and sound investments that make sense from an investor’s standpoint and you’re getting a good return on your investment. Of course the deferred benefits you’ll receive from having an OZ are phenomenal, but it only makes sense if you're making a good investment. Also, your realtor will make sure that the investment does not defeat the main purpose of the law which is revitalizing these economic distressed areas because you don’t want to displace or drive anyone out of the neighborhood. Feel free to reach out to us for more information and for a free list of residential and commercial properties for sale in Opportunity Zones in San Jose and Northern California. What's my home's worth? Looking for a top realtor in San Jose? Capri Ndikum is a top San Jose Real Estate agent & broker/owner of Citi One Realty located in San Jose, CA with over 21 years of real estate experience. The American Institute of Real Estate Professionals listed Capri Ndikum as the 10 Best Real Estate Agents in California. Give us a call!

Why Is Now a Good Time to Sell Real Estate?

July 5, 2020
Why Is Now A Good Time To Sell Real Estate? 2020 has indeed been an interesting and strange year. The San Jose real estate market was hit the hardest in Northern California in March of this year. With Santa Clara County and Governor Newson calling a state of emergency. Many home buyers and home owners alike delayed, canceled and put off their dreams while the stay in place order was and still is in effect in many regions of the state. As California is slowly starting to get back into normalcy homeowners and home buyers in San Jose and the rest of the state of California are trying to decide if now is a good time to buy or sell their San Jose real estate. San Jose is in the heart of Silicon Valley with a robust economy that is unique in its own nature. There was already a shortage of houses for sale in San Jose, Willow Glen, Los Gatos, and the South Bay Area prior to Covid-19. With so many home buyers wanting to move to San Jose, CA because of the city’s high rated schools like Silver Creek High School, Los Gatos High School in Los Gatos, Evergreen College in Silver Creek San Jose, and also because there’s just so many activities for the family to enjoy like great parks, restaurants, museums, and shopping at the well renowned Valley Fair Mall in San Jose, Santa Clara. There’s also Santa Ana Row which is renown for it’s high class and elegant boutique shops, classy restaurants and evening entertainment. San Jose Real Estate The South Bay is nestled and surrounded by beautiful green hills and mountain belts which makes it hard for home builders to expand and develop new housing for San Jose residents and new comers. This is one of the reasons why there is such a great supply and demand situation in San Jose and the rest of the South Bay. Another contribution to the supply and demand issue is that San Jose is the heart of the technology world. Many of the millennials here have great employment from high tech companies like Apple, Facebook, Microsoft, you name it and it’s here! There are just so many more able and qualified home buyers than there are houses for sale in San Jose. So with that being said, there has always been a housing shortage in San Jose, and now with the Covid-19 Corona Virus the housing supply is even more scarce. More home buyers living in apartment complexes in the city are also entering into the San Jose real estate market and moving into houses for sale in San Jose, Gilroy, Morgan Hill and Los Gatos in order to distance themselves from the public providing to them a feel or sense of safety and security from the Covid-19. This is why the year of 2020 is a very unique and complex year for San Jose real estate for many reasons. Buying or selling your home in San Jose this year has its advantages, and it’s disadvantages. But, first let's go over all the advantages to buying San Jose Real Estate during the Covid-19 the Corona Virus era. The Covid-19 Corona Virus has created its own new economy, it’s own advantages, and disadvantages. As humans, we all want to feel safe and secure, we all want to protect ourselves, and our families from the pandemic. We all have similar reactions and ways of responding when there is a pandemic, and when everyone is reacting the same way at the same time a climate is created. This new climate is creating both disadvantages and advantages for some depending on where you are standing. During the pandemic home buyers and sellers were staying indoors until recently. The stay in place order has laxed and the summer weather has warmed up and stimulated an all excitement in the air for home buyers that had been home shopping online. Many people who hadn’t left their bay area homes are now getting back to their normal lives and visiting houses for sale in San Jose for the first time. So many San Jose home buyers and families stayed indoors for several months this year which is the longest time they have ever had to stay inside of their homes. On the other side of the San Jose real estate spectrum are the home owners. Home owners are wary of the current environment and many are not selling their homes yet. Many homeowners in San Jose cannot vacate their homes and actually need to first sell their current home before they can move out, and they are saying that they are not ready to allow the public to enter into their occupied homes. Buyer’s alike are more willing to take a tour of a vacant home with their San Jose real estate agent, than tour a home that is still occupied. The two combined situations are creating an even deeper housing shortage in San Jose, the South bay and even the East bay area including real estate in Stockton and Patterson. Home buyers that are looking to buy in the South Bay and the East Bay suburbs of Dublin, Danville, Livermore and Pleasanton are in general viewing just the empty and vacant houses for sale to avoid any chances of getting exposed to Covid-19. So if you are a homeowner thinking about selling your San Jose Real Estate what do you do? Is now a good time? Because of the greater housing shortage and lack of homes for sale in San Jose home values are ever increasing. Low interest rates are also a big factor that is driving home buyers and many first time home buyers into the San Jose real estate market. There are so many driving forces that have come together in the new 2020 Corona Virus era that if you own a home in San Jose’s Silicon Valley now is actually a great time to sell!

How To Buy San Jose Real Estate With Zero Down Payment

By capri.sellsproperties • May 28, 2020
If you are a first time home buyer looking to buy San Jose real estate, or real estate anywhere in Northern California there are several different types of Down Payment Assistance government programs that are available to you. These programs allow you to purchase a home or a brand new home with zero down payment. Both CalHFA -FHA, Conventional, VA and USDA loan types are available. It can get a little confusing knowing and understanding all the different programs that are available in California and if you qualify. This guide will help give you the information you will need to have a better understanding, and to be better prepared before meeting and sitting down with a lender. The state of California offers these programs to first time home buyers, however with some of these programs you don’t have to be a first time home buyer. First Time Home Buyer? So, what is a first time home buyer? A first time home buyer is someone who currently doesn’t own any real property, or someone who used to own real estate but sold it at least 3 years ago. This means that if you used to own real estate in San Jose or anywhere else in California and you sold it three years ago or more you would be a first time homebuyer and you would qualify for these programs. The Down Payment Assistance Program Depending on the lender, you would need at least a 640 credit score to qualify for most of the down payment assistance programs. A lot of great new changes have been made for 2020 to help make these programs more available and accessible to home buyers and communities. These programs are great for first time home buyers and they’re actually put in place to encourage the community to become homeowners, and enjoy all the benefits that come along with home ownership. Down Payment Assistance programs have been around for a long time, but what makes the current program so nice and different from the traditional ones of the past is that you actually don’t have to make any monthly payments on the money you borrow to pay for your down payment and/or closing costs. Sounds a bit strange? Well, here’s how it works...The “My Home” down payment assistance program is a deferred payment loan offering you assistance on covering your down payment and closing costs by offering you a second mortgage. So, you will have your first mortgage which could be either a regular Conventional Loan or FHA Loan, and then you would have a second mortgage to cover your down payment and/or closing costs. In order to help you keep your monthly mortgage payments down, you would only make monthly payments on the first mortgage loan. You would only pay the second mortgage when you decide to sell your house and pay it off in full, through escrow, or when you decide to refinance your home. That is why the second mortgage is called “silent seconds”. Because it’s sort of like you won’t even know they are there. The second mortgage needs to be 3.5% of the purchase price, and there is a $10,000 cap unless you're purchasing new construction, or you’re a school employee or a fire department employee. CalHFA Program This program is an FHA program offering you a 30 yr fixed interest rate first mortgage loan and 3.5% down payment. To qualify the home you are buying has to be your primary residence, so you do have to live in the home. You also are required to complete a homebuyer education counseling class, obtain and present a certificate of completion. If you prefer to take the course with the online option there is a $99 fee, and it’s 8 hours total. If there are two people on the loan, only one of the borrowers are required to take the course. What’s so nice is, for those needing assistance with their closing costs and down payment this program can be combined with the My Home Second Mortgage. CalPLUS FHA Program This is an FHA program with a 30 year fixed rate that has a slightly higher interest rate than the regular FHA Loan. This program is combined together with the CalHFA Zero Interest Rate Program to cover your closing costs. Your new home has to be your primary address, so you must occupy your new home to be eligible and complete the homebuyer education counseling course, and just remember only one of two buyers living in the home will need to take the course.. You must also meet the income limits for the program for example for Santa Clara and Alameda County the new income limit is $236,000, however effective June 1st, 2020 CalHFA will no longer have sales price limits for buyers purchasing single family homes. As of April 2020 the Maximum Debt-to-Income Ratio is now 43% which is good news for first time home buyers because it allows home buyers purchasing real estate in San Jose and throughout California where real estate can be a bit pricey to qualify for a little more. CalHFA Conventional This program offers a conventional loan to home buyers, and it doesn’t require you to be a first time home buyer. The minimum down payment is only 3% of the purchase price of the home, so if your purchase price is $700,000 your down payment would be $21,000. With this conventional program a minimum credit score of 680 is required. In most cases since you are putting down such a low down payment you may want to ask your loan officer if there is PMI or Private Mortgage Insurance. Private Mortgage Insurance is a monthly insurance that’s included and added to your monthly mortgage payments. It is generally required for borrowers with an 80% or higher LTV who are putting down less than 20% to purchase their home. Because of the lower investment from the buyer toward their down payment they are deemed as a higher risk to the lender, so PMI protects the lender in case the buyer ever defaults on the loan. The interest rates for this program are generally low, however there are different factors that will be considered by the lender such as your credit scores, and financial circumstances in order to determine your score. Since interest rates can change from day to day, and are pretty low right now it is good to have your loan officer lock you into a good rate once you have been approved. Cal PLUS Conventional This is the second mortgage that goes with the CalHFA Conventional if you need help paying for your closing costs and/or down payment. With this loan you will have a zero down payment. Income limits do apply for this program so you will need to check with your loan officer to see if you qualify. However starting June 1 2020 there are no purchase price limits. The new home must be your primary residence, and the first time homebuyer class and certificate is required before close of escrow. This program covers several types of San Jose Real Estate such as single family homes, condominiums, one- unit residences, manufactured homes are ok, and guest houses. Conventional 97 Mortgage/ Fannie Mae HomeReady Loan/ Freddie Mac Home Possible Loan If you are wanting to use a lower down payment; these loans are a great product. These programs only require a minimum credit score of 620, and the minimum down payment is just 3% compared to the traditional 5% on a Conventional loan. There is PMI, however it goes away after 10 years of owning your home. CALHFA USDA This is a USDA Guaranteed First Mortgage loan that is limited to rural areas, but there are plenty of rural areas outside and around San Jose, the South Bay and the Bay Area. This could be a great option for anyone interested in living in a rural area, and don’t mind the commute. This is a NO DOWN PAYMENT loan, and it has a 30 year fixed rate. The CalHFA USDA could be combined together with the My Home Program mentioned earlier if you need assistance with your down payment and/or closing costs. This loan requires no PMI Private Mortgage Insurance, which helps to reduce your monthly payments, and allows you to qualify for a bit more house. Minimum credit score for this program is 640. It also has income limits that are lower than some of the other programs. The program is for first time home buyers, and you have to take the required first time home buyer education counseling course and receive the certificate to qualify. You could buy a single family home, condominium, or manufactured home with the CalHFA USDA loan. There is of course a 5 acre limit on the land you can buy. CalHFA- VA Program This VA insured loan has a CalHFA First Mortgage fixed interest rate with a 30 year fixed rate. With this loan program you must occupy the home as your primary residence and complete the first time home buyer course and obtain the certificate, presenting a valid certificate of eligibility per VA Guidelines. Income limits do apply. Your new home has to be a single family residence, One- unit residence, condominium, guest house, granny units, and in-law units may also qualify. Items Needed To Qualify These programs are great and offer zero down payment options to first time home buyers. In order to qualify for these programs you will need to provide some documentation such as your most recent pay stubs, two years of your most recent tax returns, your employment history and two months of your most recent bank statements. CalHFA is not a lending institution and does not lend money to the public. They only work through approved lenders, and it is generally the lender that will decide the qualifying guidelines, and whether your application is approved or not. So it’s important that you work with a San Jose real estate agent, and loan officer that is familiar and has access to these programs. If you are interested in applying or receiving more information about the Down Payment Assistance Programs in the Bay Area, San Jose, Gilroy, Hollister, or it’s surrounding areas including Stockton and the Central Valley please feel free to reach out to us through our chat or by giving us a call, we are happy to help! What my home's worth? Looking for a top realtor in San Jose? Capri Ndikum is a top San Jose Real Estate agent & broker/owner of Citi One Realty located in San Jose, CA with over 20 years of real estate experience. The American Institute of Real Estate Professionals listed Capri Ndikum as the 10 Best Real Estate Agents in California.
More Posts
Share by: