Almost all the mortgage lending in Sacramento is for fixed-rate mortgages with terms of between 10 to 30 years. Many borrowers find that a 30-year fixed term mortgage suits them perfectly and this is the mortgage of choice for most California homeowners.

Shorter-term fixed-rate mortgages, usually of 15 years, can save you money on interest payments as you’re paying the loan over less time. However, they do increase your monthly mortgage repayments and the shorter the loan duration is, the larger they will become.

ARMs have lower interest rates at the start than fixed-rate mortgages which means that, so long as interest rates don’t go up during the mortgage term, you’ll pay less each month. However, as interest rates can vary, depending on the economic climate at the time, an ARM is typically better if you’re only planning to stay in a home for a few years.

For first-time homebuyers in California, FHA loans are becoming a very popular option. They only require a 3.5% downpayment and they’re available to buyers with less than perfect credit scores. In some cases, FICO scores as low as 620 have been accepted. Gifts from family members (related by blood or marriage) are permitted on FHA loans too and this is great if you’re a first-time buyer relying on financial assistance from relatives to get started.

If you’re putting down less than 80% of the purchase price, the lender will require you to pay a mortgage insurance premium (MIP). Also, the criteria for a California FHA states that you can’t have owned or had an interest in a property in the three years before applying.

A loan from the United States Department of Agriculture (USDA) doesn’t require a down payment and they don’t set a minimum credit score for borrowers either. However, they will still look at your credit history, even if it’s not traditional credit like paying utility bills, and buyers who get a loan need to show that they can pay it back.

As with other government-backed loans, USDA loans require an initial payment at the time of closing and there’s a mortgage insurance fee if the loan-to-value (LTV) ratio is more than 80%. This fee will be included in the repayments.

There is a state agency called the California Housing Finance Agency (CalHFA) which was set up in 1975 to help low and middle-income residents afford decent housing. If you’re a first-time buyer, you could get help with your down payment through two programs that can be used with standard mortgages.

The MyHome Assistance small loan initiative offers 5% of the loan amount and is available if you are first-time homebuyers who need help with the down payment and closing costs. You don’t have to pay back this loan until the property is sold or paid in full.

The Zip (Zero Interest Program) is very similar to MyHome Assistance, but the loan amount is only 3% of the total mortgage, and it has a 0% interest rate. ZIP repayment is also deferred.

One of the best things about VA loans is that there is no down payment required. If you’re looking to get a VA loan, you must either be on active duty or have been discharged with honor. Unlike other government-backed loans, there is no mortgage insurance required but there is a one-time fee. Loan limits work the same way as in other programs.

In California, if you’re 62 or over you can use a reverse mortgage to release equity from your home while you’re still living there. There is no risk of eviction with this kind of loan as it isn’t repaid until the borrower dies or moves out.

Reverse mortgages can be great for helping senior citizens pay for things like health care or home improvements. The equity raised can be paid in a lump sum or overtime in regular amounts.

Refinancing replaces your current mortgage loan with a new one, so you can choose the type of interest you pay, the length of the term, and the amount of money you want to borrow.

If you’re interested in refinancing, it’s important to get advice from licensed mortgage experts like UWL who can help you set clear financial objectives and choose the best way to refinance.