"Thank you Mark! You’ve been a pleasure to work with. I never imagined it would be this easy to refinance. Thanks for your services!"
Rebecca Simonson P.E., LEED AP2017 California Homebuyer’s Checklist
In 2017, true stated income has made a comeback in California, making it easier to get a home loan without income documentation. However, interest rates are temperamental, while homes remain in demand. So if you’re a first-time homebuyer, you need to know what you’re doing to flourish, and not flounder, in California’s 2017 housing market.
That’s why our team of mortgage professionals, with over 20 years of combined experience, have compiled a Top 10 checklist for first-time homebuyers.
1. Get an experienced real estate team.
DIY homebuying can be a costly rookie mistake. When purchasing a home, the seller of the home pays the real estate agent, not the buyer. Since the seller is picking up the tab, you might as well hire the best most experienced real estate agent. Also working with the best Mortgage Broker is critical to securing a proper home loan tailored to your needs, not the lender’s.
2. Check your credit for errors.
The FTC reports that as much as 20% of consumers have errors on their credit reports. Not resolving an error can negatively impact your loan interest rate and more. Check your credit and report any error before embarking on your homebuying quest.
3. Watch your debt-to-income ratio.
When you’re house hunting, assess your finances like a lender would to determine what’s in your budget. To do so, you’ll want to make sure your debt is 36% or less than your household income. This is considered debt-to-income ratio is only a guideline. It’s always best to work directly with a mortgage professional for personal guidance.
4. Get pre-approved.
In a seller’s housing market, first-time homebuyers don’t have much of a chance of competing without a pre-approval letter. Talk to your loan agent about getting you started on the pre-qualification process. After you’re pre-qualified, he or she will walk you through the pre-approval process. Once you have your pre-approval letter, sellers will take your bids seriously, and you’ll closer to moving into your new home.
Apply for a home loan now without income documentation.
5. Consider all the costs.
- The down payment: While there are options to put zero down, homebuyers are expected to put closer to 20% down.
- Closing costs: They vary, but on average closing costs run about two to five percent of the purchase price of the house. Ask your agent to negotiate closing costs being covered by the seller on your behalf.
- Cash reserves: Careful not to bleed the piggy bank getting into the house. You’ll need some cash flow to live in it. Also, cash reserves are often required by lenders.
Use a free mortgage calculator to see the loan amount of your new home.
6. Scroll down the list.
That means look past the newest listings at the homes that have been on the market for a while. Sellers for these homes tend to accept below-listing price, as opposed to newly listed houses, which are often overpriced.
7. See the signs … for neighborhoods on the rise.
- New commerce and job creation
- City renovations
- Influx of younger residents
- Presence of health food stores like Trader Joes
8. Don’t get emotional.
You’ve seen it in every home shopping reality show. Half of the couple falls in love with a house that’s conspicuously impractical. It happens all the time to first-time homebuyers, and they either lose the bid or have buyer’s remorse. It’s better to set aside emotions when buying a house, at least until you’ve made a series of practical decisions.
9. Shop before loan approval.
In a sellers’ market, homes tend to move more quickly than loans are processed. No need to wait. Take your pre-approval letter and get started, but keep your options open.
10. Get a home inspection.
Always. Independent is best. Know that a home inspection is not the same as an appraisal. An independent home inspection will inform you of the actual condition of the house. Without this, you can’t negotiate repairs, concessions, or a reduction in the price of the home, if necessary.
It may seem like a lot, but with the right team backing you up, you’ll be earning equity on your new house before you can open all your housewarming gifts.
Meet our team of mortgage professionals. We’re happy to answer any and all of your home loan questions. Click here to contact us.
