Definition of Down Payment:
Down Payment Requirements in Orange County, California:
The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage. This is normally expressed as a percentage of the total purchase price of the home. For a conventional loan and for a jumbo loan that is going through Fannie Mae or Freddie Mac the borrower must be prepared to put at least 20% down payment. If they anticipate using FHA for financing that are required to put at least 3.5% down payment. If the prospective buyer is going to need to use private money or a hard money loan in Orange County, California they should anticipate putting a down payment of anywhere between 30% - 35%. Down payments are paid via cashier's check or wire transfer to the escrow agent handling the closing of the transaction and must be deposited before the successful close of escrow.
Note: The buyer will also need to have additional money put aside as “reserves”, normally 3-months PITI (principal, interest, taxes and insurance) or more in the bank and they are also responsible for any points and closing costs associated with the loan they are securing. So, just because the borrower has the 20% down payment and has the required FICO score DOES NOT mean that they automatically qualify for a loan, they also must have the reserves in the bank and the additional money for any points/discount points/closing costs.