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First time home buyers: How to buy your first home

Santa Clarita is an excellent community to purchase a first home and taking the first step is very important. Buying your first home is a very special accomplishment, not much different than getting married or the birth of a child in terms of importance in one’s life. However, people should ALWAYS be more important than acquiring possessions. The City of Santa Clarita including all the areas of Valencia, Stevenson Ranch, Saugus, Canyon Country , Newhall and Castaic are all safe and growing newer communities with homes in affordable price ranges that makes it an excellent choice for a first home purchase.

Finding a real estate agent that works with first time home buyers is important so that he or she can help you navigate through all of the confusing processes and explain what needs to be done at each step. A real estate agent is essential for a first time home buyer . There are so many steps that need to be completed and an experienced agent will help explain what you need to do at each point. The agent will walk you through each step from making an offer and getting it accepted to closing escrow and picking up the keys to your new home. The agent also will make sure that all of your paperwork is completed correctly throughout the transaction which will avoid unnecessary problems and delays.

An appointment with a lender should be made as soon as possible so that the lender can “prequalify” you. Most real estate agent can provide you with several names of good lenders. You should make an appointment to speak with a lender as soon as possible in the process, before you start shopping for a home. The lender will prequalify you and help you to decide what you can comfortably afford and how much the total monthly payments on the house will be. The lender will also explain to you all of the many different types of loan programs available, some for first time buyers, and will help you choose a program most suitable for your needs. You also need to find out how much money you will need to have available for the down payment, generally a minimum of 3.5%. However there are special government programs where the government pays your down payment and sometimes the seller will part or all of your pay your down payment, although sometimes the price of the home may need to be increased slightly to cover that credit.

The real estate agent can help you to find a good lender based on those that have done good jobs for past clients. It is wise to ask the real estate agent for a list of several good lenders, they may be mortgage brokers and bankers rather than just one name.

Find out how much money you will need to save as a down payment to purchase a home and to also cover your closing costs. You also need to find out how much money you will need to have available for the down payment, generally a minimum of 3.5%. However there are special government programs where the government pays your down payment and sometimes the seller will part or all of your pay your down payment, although sometimes the price of the home may need to be increased slightly to cover that credit. You need to find out approximately how much you need to save to cover closing costs. Typically you can expect to pay anywhere from 3-4% to pay closing costs. Sometimes you can have the seller pay a “closing cost credit” to the buyer to cover those costs. It is helpful if you know what price range of house you can afford so that you can calculate the down payment needed and closing costs.

To make an offer on a property you need to include a preapproval letter from a lender, and proof of funds to close escrow. When you find a home that you would like to purchase you will need to submit a “preapproval letter” from your lender and a copy of the funds or bank account that you will be using to pay the down payment. If a relative is giving you the money for the down payment then you would submit a letter stating that the down payment is a gift.

Once the offer is accepted you would open escrow and send in a deposit. Usually escrow is opened 3 days or less after an offer is accepted. You will be asked to submit a deposit that you had offered to “hold” the house called an “earnest money deposit.” You then have a specified number of day within which to conduct your inspections.

You should start your inspections as soon as possible once escrow is opened so that you will be able to meet your contingency removal deadlines. There are several types of inspections that will be needed to be done usually between 10-17 days after opening escrow as part of your contingencies for purchasing the house. Once those inspections are completed the listing agent will send a form to your realtor for you to sign asking you to remove the contingencies on your home. You only remove those contingencies if you are satisfied with the results of those inspections and still want to buy the home, since you can forfeit the deposit if you remove them and then decide not to purchase the home . Typical inspections consist of a home inspection, termite inspection, loan appraisal inspection and if there is a swimming pool then a pool inspection would be also wise to have done. The home inspection should be done with a certified home inspector who will spend between 2-3 hours going through the interior and exterior of the home and providing you with a report of all of the findings about what was in need of repair, the cost typically ranges from $200-$500.

A certified pest control company will conduct the termite inspection and also issue a report as to their findings of both type 1 and type 2 termite and fungus damage along with an estimate if any work needs to be done, typically the seller pays the termite inspection fee of $75-$95. Your lender will ask you to pay for a home appraisal since it is a condition of your loan, typically between $300-$500.The appraisal is a condition for you receiving your loan and it must show that the house is worth what you have offered to pay for it. If you are paying all cash for your home then you can waive the right to have an appraisal although I believe it is important that you know the true market value of your home even if it is not required by a lender. Certain loans such as the “home path” loan program for HUD homes