Mortgage Basics & Financing Options for First-Time Home Buyers in California

Are you a first-time home buyer in California? Thinking about taking that leap toward homeownership but unsure where to begin?

I’m Keith Walker, your trusted California real estate advisor, and I’m here to help simplify the home financing process so you can move forward with clarity and confidence. While I’m not a mortgage lender, I regularly work with top local loan professionals and can connect you with trusted experts to guide you further.

Let’s break down the essential mortgage and financing basics every first-time buyer should know.

Here are the most common loan types you’ll encounter:

✅ Conventional Loans

Ideal for buyers with good credit.

• Down payment as low as 3%

• PMI required if under 20% equity

• Flexible terms and competitive rates

✅ FHA Loans

Great for buyers with limited savings or lower credit.

• Down payment of 3.5%

• More lenient credit score requirements

• Mortgage insurance required

✅ VA & USDA Loans

• VA Loans for eligible veterans and military service members (0% down, no PMI)

• USDA Loans for rural-area buyers meeting specific income and location criteria

In high-cost areas like the Bay Area, many homes exceed the conforming loan limit of $806,500. In Santa Clara County, for example, the conforming limit rises to $1,209,750—but many homes still require what's known as a Jumbo Loan.

What You’ll Need for a Jumbo Loan:

• Higher credit score (typically 700+)
• 10–20% down payment (some programs offer as low as 5%)
• Lower DTI (below 43%)
• Stronger asset reserves (e.g., 6–12 months of housing expenses in savings)
• Detailed documentation, especially for tech industry income

Bonus: Using RSUs to Qualify for a Mortgage

Many Bay Area professionals receive Restricted Stock Units (RSUs) as part of their compensation. Some lenders allow RSUs to count as qualifying income—potentially increasing your buying power.

You may be able to include RSUs in your income if:

• You have at least 2 years of vested RSU history
• Your RSUs come from a publicly traded company
• Your employer confirms continued RSU issuance
• RSUs can improve your debt-to-income ratio or qualify you for larger loan amounts, especially helpful with jumbo financing.

Next Steps: Let’s Explore Your Options

Not sure what you qualify for? Have questions about the best financing path based on your unique goals?

📩 Reach out today for a no-pressure consultation. I’ll help you understand your options and refer you to trusted loan professionals who specialize in working with first-time California buyers.

And if this was helpful, don’t forget to share it with someone you know who’s thinking about buying a home!

I’m Keith Walker—here to educate and navigate, not speculate and fabricate. Let’s make your California homeownership dream a reality.