What You Need To Buy A House In California
The house buying process can seem a bit confusing, even if you already have gone through the process before. Before you start shopping, there are some steps you can take to make the process easier. These include checking your credit score and getting pre-qualified or pre-approved for a mortgage loan.At Credit Union of Southern California (CU SoCal), we make getting a mortgage easy! Call 866.287.6225 today to schedule a no-obligation consultation and learn about our mortgages, home equity lines of credit, auto loans, personal loans, checking and savings accounts, and other banking products. As a full-service financial institution, we look forward to helping you with all your banking needs. Read-on to learn more about the house buying process and how to buy a house in California.
what you need to buy a house in california
A down payment is usually (but not always) required when buying a house in California. They can range from 3% to 20% of the purchase price, depending on the type of loan being used and other factors. Military members and veterans can often qualify for VA home loans, which offer 100% financing. The FHA loan program, which is particularly popular among first-time buyers in California, allows borrowers to put 3.5% down.
Also, the amount of debt you have may affect your ability to get mortgage financing. So buying a house in California is another crucial requirement. In fact, it's the ratio of your gross recurring debts to your monthly income that really counts.
When you use a mortgage loan to buy a house in California, there's a fair chance the property will be priced before financing. Home appraisal is therefore another key requirement when purchasing a home.
A licensed and certified home appraiser can visit the home during this process and assess it inside and out. Then the appraiser will provide an estimate of the value of the property in the current market for real estate. The lender needs to make sure the amount owed for the property represents the true market value.
There really isn't anything for you to do as a home buyer during the valuation process. The lender will schedule it, and the appraiser must give the lender back his or her paper. It is just something you need to be conscious of.
Whether you're actively house hunting or just starting to browse homes on Zillow, it's never too early to find a great local realtor to guide you on your search. An experienced agent can help you navigate a tricky housing market, explore your financial options, and negotiate the best deal possible.
Borrowers must not earn more than the maximum household income limit set by the California Housing Finance Agency. You can check their income requirements here. Participants will also need to complete a homebuyer education and counseling course.
The timing of your house hunt in California can have a big impact on your number of options. For example, in California, May has historically seen the most homesfor sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.
Once you find a California house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.
California does not require you to hire a real estate attorney to buy a home. However, depending on your circumstances, you might consider hiring one anyways. If you do, treat the process similarly to hiring an agent. Interview multiple attorneys and proceed with the one that best meets your needs.
If you're planning on buying a house in California, we can help you prepare. There are some important steps to consider when looking for your dream home. How much house can you afford? Will you want to apply for a mortgage? Our California first time home buyer guide will help you answer those questions. Read our 5 essential tips for buying a house in California to learn more about current California mortgage rates, how to apply for a mortgage and more.
A mortgage calculator can be helpful if you're planning on buying your first house or if you're ready to refinance your current home. Your interest rate is an important factor in determining your monthly payment. It is also affected by your down payment, the location of the property, the term of the loan and other factors.
A real estate agent is trained and licensed to help you find what you're looking for based on your price range and preferences. They also have skills in negotiating purchases and know the required paperwork you'll need to make an offer on a house.
Let's say you've found your dream home. It meets all your needs, preferences and your budget, and the seller has accepted your offer. Now you'll need to apply for a loan. First, you'll need to choose a lender and complete an application.
Your lender will need to verify your overall financial situation with a variety of documents. We've outlined 6 most common documents that lenders will need to understand your creditworthiness, employment history, and the sales agreement with the seller of the house.
Buying a house in California could be an exciting new venture for you. With these helpful tips, you'll be more prepared to make this significant financial decision. For first time homebuyers, navigating the home buying process is easier when you have the advice of experienced professionals.
Have a question about your account, applying for a loan or perhaps you're ready to talk refinancing? Whatever your question or need, our Member Service Center is always happily available to walk you through every step of the process with your best interest at heart.
In addition, most programs let you use gifted money or down payment assistance (DPA) to cover your down payment and closing costs. Depending on the mortgage loan you choose, you could potentially get into your new house with minimal cash out of pocket.
As the program name implies, you will need to repay the original down payment loan plus a share of the appreciation in the value of the home. So for example, if you receive a 20 percent down payment loan toward your new home, the state housing authority will collect 20 percent of the increased value when you sell, transfer, or refinance the home.
Buying a house is a complicated process, especially for a first time home buyer. At Schorr Law, our real estate attorneys in California have seen their fair share of good deals (deals that close) and bad deals (deals that do not close). Our lead attorney, Zachary Schorr, has assisted with the legal aspects of both routine and very complicated multi million-dollar real estate purchases. In fact, he has been involved with literally hundreds of millions of dollars in real estate in Southern California.
Buyers who purchase with less than 20% down are required to pay for private mortgage insurance, as well. So if a buyer manages to thread the needle and purchase a $1.3 million home with only 10% down, monthly payments including principal, interest, taxes and insurance would be $8,633.
According to Rent.com, housing costs should not exceed 30% of your income. To keep the payment on a median-priced home here in the Bay Area below 30% of your income, after putting down 20%, a person would need to earn approximately $24,240 per month or $290,880 per year.
However, according to Yee, the max loan amount for FHA in the Bay Area is $970,800, so an FHA buyer would need to cover the 3.5% and the balance in cash to purchase. (You can look up FHA limits in your county here.)
This means that someone looking to buy a median-priced home using an FHA loan would need to have a down payment of around $33,978 as well as the remaining $329,200 that would not be covered by FHA when purchasing a $1.3 million home.
The California real estate market is starting to cool off as of December, with the average home staying on the market for 11 weeks before selling. However, some markets remain hot, such as the town of Tuolomne, which has been selling houses within one day of putting them on the market. Residential properties in California Hot Springs, meanwhile, stay listed for more than one year before selling.
You can know whether a property you are interested in buying is in a Mello-Roos Community Facilities District by asking the real estate agent selling the house. They are required to disclose this information.
California law requires home sellers to submit a lengthy document disclosing the physical condition of the house as well as natural hazards and environmental concerns in the area. This is crucial as the state is located on earthquake fault lines and routinely experiences earthquakes, wildfires, and flooding.
California law allows buyers and sellers to be represented by real estate agents or lawyers at closing. This can be beneficial to real estate investors who are busy or live out of the state since they will not need to worry about scheduling conflicts holding up the actual closing process.
Now that you know some of the important state-specific real estate laws, it is time to learn how to buy a house in California in eight steps, starting with what do you need to buy a house in California to what you can expect on closing day.
Before you take the steps to buying a house in California, you must first understand how your financial situation impacts your buying options. You can do this by taking inventory of the following financial requirements to buy a house in California:
If you plan to take out a home loan to purchase your investment property, then you need to have proof of receiving stable income from an employer within the last two years. Meanwhile, self-employed or long-time real estate investors can provide verifiable documentation on where their money comes from.
To qualify for a conventional mortgage, you need to have a credit score of at least 620. You may be able to get a Federal Housing Administration (FHA) loan with a credit score of 580, but you must also have a lower debt-to-income ratio.
In case you have delinquent debt, or your DTI ratio exceeds what you need to qualify for a loan, then try to pay them off before applying for a mortgage. When you have debt that is already with a collection agency, make sure that the debt is yours before setting up a payment plan with them. 041b061a72