Whether it’s your first or your fifth time, buying a new home is an adventure. And it can be an expensive one, especially here in California. But buying a home is possible! These steps can help.
1: Know your financial picture
Review your income, expenses, debts, and savings to get an idea of how much you can comfortably afford to spend on a monthly mortgage payment. An online calculator can help.
2: Learn about mortgage options
Talk to a lender — such as a Golden 1 Home Loan Advisor — to learn about different home loan programs, including those with low down payments or less stringent credit score requirements, like FHA mortgages.
3: Get pre-approved
Our Home Loan Advisors can review your financial documents and provide a pre-approval letter stating the amount you’re eligible to borrow. This gives you a bigger advantage with home sellers than pre-qualification, which is only an estimate of your borrowing power.
4: Understand mortgage insurance and down payments
Some mortgages require a down payment of just 3% to 5%. However, anything under 20% down means you’ll pay mortgage insurance, which helps protect the lender in case you default on the loan.
5: Prepare for upfront and ongoing costs
Your monthly mortgage payment will include principal, interest, homeowners insurance, property tax, and mortgage insurance (if applicable). You’ll also pay closing costs upfront, and you should set money aside every month for ongoing maintenance.
6: Know what’s negotiable
With help from your real estate agent, your Golden 1 Home Loan Advisor, and some shopping around, you may be able to negotiate the home price, certain closing costs, your interest rate, and homeowners insurance premiums.
Helping hands
A professional real estate agent, like those in the Golden 1 Buyer Advantage Program, can help you locate properties and understand the complex homebuying process.
Golden 1 Home Loan Advisors can also help make your home dreams reality by working with you on pre-approval, a homebuying budget, and mortgage options. Find a Home Loan Advisor near you in our Directory, by calling us at 1-800-917-9000 or by reaching out through the Golden 1 mobile app.
Sources
“What are the costs associated with buying a home?” Jennifer Bradley Franklin, Bankrate, posted May 12, 2021, https://www.bankrate.com/mortgages/costs-of-buying-a-home/, accessed July 2, 2021
“8 Steps to Buying a Home,” MyHome by Freddie Mac, posted Sept. 9, 2020, https://myhome.freddiemac.com/blog/homeownership/20200909_8_tips_for_homebuying.page, accessed July 2, 2021
“Buying a Home,” MyHome by FreddieMac, https://myhome.freddiemac.com/buying, accessed July 2, 2021
“How to Buy a House in 5 Steps,” Lena Borrelli, MyMove.com, updated Dec. 11, 2020, https://www.mymove.com/mortgage/guides/home-buying/, accessed July 2, 2021
“What is the difference between a mortgage interest rate and an APR?” Consumer Financial Protection Bureau, last review Nov. 15, 2019, https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-a-mortgage-interest-rate-and-an-apr-en-135/, accessed July 2, 2021
