Buying your first home in California can often feel like signing up for a marathon you haven’t trained for. You might find yourself quite confused with the complexities and the high costs. Moreover, the overwhelming market fluctuations can make you unsure of where to start.
Home to millions of residents, California is a top choice for homebuyers. Want to become a proud California homeowner but unsure where to start? I’m here to help! With my 20 years of expertise and enthusiasm, I, Amish Munshi, will guide you through the competitive market and neighbourhood changes, making your dream home a reality.
Steps To Buy Your First Home In California
Do you know that as of December 2023, the median house price of residential real estate in California stands at $756,200, which has shown a notable increase since 2012?
Thus it is evident that buying houses is a serious financial investment. Below, with my experience, I have outlined the steps to help you buy your first home in California:
Step 1: Gather Your Finances:
Purchasing a house is no donut and is one of the most important financial steps that changes life and is taken in his or her lifetime. Hence, knowing how much one is capable of should be emphatic. There is no way of undertaking successful financial planning without evaluating all the incomes and expenditures.
Be sure to include costs like property taxes, insurance, as well as other maintenance fees. It is important to note that property prices in the state are relatively high. You might be expected to part with some down payment. While some mortgages require as little as a 3.5% down payment, most loans necessitate a 20% down payment.
Step 2: Get Pre-Approved For A Mortgage:
Being pre-approved for a mortgage is one of the critical and significant actions toward purchasing the house of your dreams in California. Most lenders disclose their rates and terms online, and since it can help make comparisons easily, it can afford the best.
While purchasing a home, one must compare things like interest rates, loan terms and conditions, and respective costs and charges. Additionally, gather your documents. Lenders love paperwork. Provide every document and evidence relating to proof of income, tax returns, bank statements or any kind of employment verification, among others.
Types of Mortgage loans
We all are aware that homes and loans go hand in hand. At Munshi Capital we offer these loans to help you purchase your dream home in California:
- Jumbo Mortgage loan: These are loans for higher value homes. Jumbo mortgage loans are offered when the houses are above the standard loan amount. Jumbo loans are given to borrowers with good credit scores.
- FHA loan: The Federal Housing Administration insures FHA loans, which are government-backed mortgages intended to increase accessibility to homeownership. If your credit score is at least 580, you must make a minimum down payment of 3.5%; if it is between 500 and 579, you must make a 10% down payment. FHA loans are well-known for their affordable interest rates and accommodating credit standards, which make them perfect for people with modest credit and first-time purchasers.
- Bank statement loans: Bank statement loans are meant for self-employed individuals. Bank statements are considered income verification sources when releasing bank statement loans.
- Short term bridge mortgages: These loans offer temporary financing. Short term bridge mortgages are offered for a period of 6-12 months and are quite good in proving vital flexibility.
Applying for these mortgage loans can be quite simple with my help. Without having to worry about any kinds of financial losses or extra burden, apply for these loans in a hassle-free manner with the only trustworthy real estate agent.
Step 3: Find A Suitable Real Estate Agent:
The process of searching for a competent agent is no less than searching for a good hairdresser; it is important to find someone who listens to their clients and works accordingly to fulfill their and their client’s needs and expectations.
A good agent is someone who will do a lot to ease your process of buying a home. Moreover, trust the process. You will need the services of a good agent who can assist in identifying homes with the right features. Hence, rely on their word and seek their advice.
Consulting a financial advisor can be a wise move. Their expertise can help uncover money-saving opportunities and improve your home loan application’s chances of success. Not to forget, your’s truly, Amish Munshi, your primary expert assistance in finding a reliable financial advisor in California suited to your needs. Surely you would not go empty handed!
Step 4: Start To Look For An Apartment:
When you go out home hunting, it is advisable to have a general idea of the requirements. Consider the number of bedrooms and bathrooms, the distance to a job or school, and, of course, if one wants a pool to cool off on those hot days. Know well the difference between lush and what you require. Moreover, attend open houses.
Step 5: Make The Offer:
Found the one? Now it’s time to take the game to the next level by making a bid. Be Ready to Negotiate. Your real estate agent will assist you in formulating your offer – taking into account current market trends or similar properties available on the market. Don’t be surprised if there will be some deliberations on your chosen topic. Negotiations are a part of the process. Also, it’s wise to go through a home inspection whenever you have your offer accepted by the seller.
Step 8: Home Inspection and Appraisal:
Once your offer is accepted, before finalizing the purchase, schedule a comprehensive home inspection to identify any potential issues with the property. Generally costing between $300 to $500, a professional home inspection assesses the property’s structural integrity, electrical systems, plumbing, HVAC, and more. This process helps buyers understand the condition of the home and negotiate repairs or adjustments with the seller. Additional specialized inspections, like for termites, radon, or mold may be necessary based on location and property type, incurring extra costs.
Step 6: Closing costs:
Closing fees in California cover a range of services and procedures related to the ownership transfer of real estate. It’s essential to budget for these costs carefully, as they can include. These include loan-related fees such as the origination fee, discount points, and underwriting fee, title search, insurance, and escrow fees, recording fees, transfer taxes and notary fees. The specific costs you will incur depend on your circumstances.
Step 7: Assistance Programs:
The California Housing Finance Agency (CalHFA) offers several loan programs designed for first-time buyers. These programs provide loans with competitive interest rates and down payment assistance tailored to different needs. While these loans must be repaid, they offer significant support for eligible buyers. Some of the assistance programs are:
- CalPLUS Conventional Loan Program
- Cal-EEM + Grant Program
- Mortgage Credit Certificate Tax Credit Program (MCC)
- Homebuyers’ Assistance Program (HAP)
- California Homebuyers’ Downpayment Assistance Program (CHDAP)
- Local Housing Authority Programs
Each program has specific qualifying criteria. Review these options to determine your eligibility and find the best assistance for your situation.
Step 6: Close The Deal:
Closing the deal is the last part of buying a house. You will be presented with numerous forms and documents to complete. Moreover, there will be closing costs that need to be met, and then, at last, you will get the keys to the new home. It is also important that you read all the documents you are signing. Moreover, do not hesitate to ask questions. It is okay to ask the agent or lawyer to explain something that you fail to understand.
Final Thoughts
Purchasing a home in California is quite an enthralling and exciting roller coaster-type journey. But, with the right strategy, the right team, and some good companies, you’ll be out there chugging on an ice-cold beverage on your house roof. Just remember that this is not only buying a house; it is the beginning, and a new life is at stake here.
Time to turn that California pad that’s more ‘wow’ and less ‘how’? With Amish Munshi on your side, finding your dream home is easier than picking the perfect surfing spot. Get expert advice and make the right choices. Contact now and soon you’ll be sipping kombucha in your own Cali oasis. Don’t stall — let’s turn that dream into your sun-soaked reality today!
