Purchasing a home in California is one of the most exciting and potentially stressful things you can do. The home buying process is also an emotional experience that is very personal to each buyer. When your emotions are involved in a purchase, however, you might end up skipping or overlooking certain details. Here are some suggestions to keep in mind during the process.
Safeguard Your Identity
Identity theft remains the fastest growing crimes in the United States. Many criminals posing as loan officers try to get you to provide your personal information—including your social security number and date of birth—up front. A reputable company will be able to give you a rate and payment quote before you give them your personal information. By keeping your personal information secure you accomplish two things:
- You keep your credit score stable by avoiding unnecessary credit inquiries
- Your personal information (date of birth, social security number) will only be provided when necessary
Steer Clear of Gimmicks
Have you been tempted to apply to a “get multiple quotes from different lenders” websites? Frequently, these organizations sell your information to dozens of different mortgage brokers who then plague you with calls or emails for weeks trying to convince you to finance with them. That’s probably not the experience you were looking for when you started researching California home loan options. So, do your homework and find a few reputable lenders to work with (like Lone Star Financing) instead of falling prey to the gimmicks of information brokers.
Establish Your Budget
What the bank says you can afford and what you know you can afford or are comfortable with paying are not necessarily the same. If you don’t already have a budget, make one. If you end up looking at homes that are outside your price range, you can put yourself in the dangerous position of trying to stretch your budget beyond your means—or cause you to feel unsatisfied with what you can actually afford.
It’s possible that while creating a budget you discover you can’t afford the type or size of home you initially desired and that you should reduce monthly expenses and/or increase your income before you even start looking. When calculating this figure use a mortgage calculator, easily found online, to research current interest rates. This will give you an estimate of what your total mortgage payments will be.
Understand Long-Term Costs
Make the time to sit down and plan out the next few years. Being aware of payments, renovations, and repairs will make all the difference in your long-term success as a homeowner, and help prevent unexpected hits to your budget. It’s common to believe after your down payment, you will have nothing to worry about each month regarding home-related expenses other than your mortgage. There are numerous housing-related costs to shoulder, including:
- Interest on your mortgage
- Property taxes
- Homeowners insurance
- Additional hazard insurance
- Homeowners association (HOA) fees (and other related fees)
- Utilities (water, power, trash, etc.)
- Maintenance costs
- Repair costs
- Furnishings, etc.
All these costs can add up very quickly, and many new homeowners find themselves unprepared. Some of these costs will surface (or resurface) long after the entire mortgage is paid off, like utilities and property taxes. Yes, there are some money-saving tax deductions you can claim as a homeowner; however, those deductions aren’t quite as significant as advertisements would have you believe. Deductions won’t offset interest on the mortgage loan or the other basic costs of home ownership.
Remember the Insurance
Do not take obtaining insurance lightly. New homeowners tend to miscalculate the importance of a solid insurance policy. Compare and contrast policies and rates, but do business with a reputable insurance company to obtain your homeowners insurance. A little extra money each month is well worth it if you’re facing a burst pipe and a big hole in your kitchen ceiling.
Many first-time buyers, in the flurry of moving in, neglect to send in their first insurance payment on time only to find the insurance company discontinued the policy the moment that payment was late, leaving a shocked home buyer facing the fact that they’re already in violation of the mortgage agreement. You can avoid a lot of hassle by getting in front of your payments. Send them early or set up automatic payments if possible. Because anything can happen in an instant, never go uninsured, even for a short period of time. It’s a costly mistake you do not want to make.
At Golden State Mortgage, we are a California based mortgage company, and specialize in FHA home loans for first time home buyers. FHA loans are a great option for first time home buyers and if this is your first home purchase then a California FHA home loans are probably your best option due to the low down payment and easier credit standards. Your down payment can be as low as 3.5% of the purchase price, and closing costs and fees can be covered by the seller. Call Lone Star Financing today at 1-800-585-6886 or fill out the quick contact form to speak with a California FHA loan consultant and get a free good faith estimate.