Are you a first-time home buyer in California? Do you plan to buy your first house in 2017? Have questions about how the process works?
You’ve come to the right place! Our California first-time home buyer guides are a great place to begin your research.
Below, we have compiled some of our most useful articles for first-time buyers, and organized them by topic. Feel free to start anywhere.
Down Payments and Closing Costs
Most first-time home buyers in California encounter out-of-pocket expenses when buying a house. There’s the down payment to consider, along with the various closing costs that accumulate along the way.
Granted, there are ways to minimize — or even eliminate — these home buying costs. For instance, military members can use VA loans to eliminate the need for a down payment. Additionally, home buyers can negotiate for the seller to cover some or all of their closing costs.
But the bottom line is that most first-time home buyers in California have to pay something in order to close the deal and get their keys. So you’ll want to start preparing for that now, by saving your money. Start a home buying fund, and contribute to it on a regular basis.
We’ve put together some related guides to help you understand these upfront, out-of-pocket expenses:
In short: Down payments range from 3% to 20% of the purchase price, depending on the type of loan you use. VA home loans offer 100% financing, for no down payment. Closing costs in California tend to average between 3% and 5% of the purchase price, but they can fall outside this range.
Current State of the Real Estate Market
The California real estate market is much too large and diverse to summarize with a single statement. With that being said, most city housing markets across the state are expected to slow down in 2017. Statewide, home prices are expected to rise more slowly in 2017 when compared to the last couple of years.
The California Association of Realtors expects prices to rise by around 4.3% during 2017. You can learn more about their outlook in this home price forecast.
As a first-time home buyer in California, you should spend some time researching your local housing market. Find out what home prices have done in recent months, and what they’re expected to do over the next few years. If the forecast calls for steadily rising home values, you might want to make your purchase sooner rather than later to avoid paying more.
Here are three more predictions for the California real estate market in 2017. Below, you’ll find some individual forecasts for major cities and metro areas around the state:
Your Mortgage Loan Options
If you plan to pay cash for a home, you can skip this section. But if you’re like the vast majority of first-time home buyers in California, and you need to use a mortgage loan to help finance your purchase, read on!
First-time buyers sometimes feel overwhelmed by the many different types of mortgage loans that are available. So let’s simplify things a bit. There are really only two major choices you have to make, when selecting a type of home loan:
- Do you want a fixed- or adjustable-rate loan?
- Do you want a government-backed home loan (like FHA and VA), or a conventional loan?
Sure, there are many other choices to make along the way. You can choose how much you want to put down, whether or not you want to pay points at closing, etc. But these are your two primary choices. So you’ll want to understand the pros and cons associated with each one. We’ve made this easy for you by creating a California first-time home buyer’s guide to mortgage loan options.
The Home Buying Process
The home buying process can seem overwhelming at first, if you’ve never been through it before. But once you understand the basic steps involved, you’ll see that it’s not that complicated after all.
While the process varies from one buyer to the next, it usually looks like this:
- Establish your housing budget.
- Shop for a mortgage and get pre-approved.
- Find a real estate agent.
- Start shopping for a house.
- Make an offer to buy the house.
- Negotiate with the seller to finalize the price and closing date.
- Have the home inspected.
- Get homeowners insurance to protect your investment.
- Close the deal and get your keys!
We’ve created a separate guide for California first-time home buyers that explains these steps in more detail, along with some related steps that are not shown above. Here are the 11 steps to buying a home.