October 18th, 2015 8:35 PM by Nathan Rufty
The first area that we need to cover when buying a house in California is the Down Payment. There are home loan programs that offer no money down such as the VA home loan program and the USDA home loan program which are available in the state of California.Other purchase home loan programs will require at least 3% on the Conventional first time home buyer program. FHA purchase home loan program requires a 3.5% down payment of the purchase amount, example, purchase amount of $300,000 at 3.5% will require $10,500 for the down payment and those funds can come for any of the sources mentioned above. If you have budgeted for a larger down payment, that is always welcomed, more down payment will reduce your monthly mortgage payment and with enough down payment, mortgage insurance will not be included in the monthly mortgage payment.The earnest money deposit also known as the EMD that is used to open escrow will count towards the cost of the loan. You will need to discuss the amount of the funds to open escrow with your real estate agent. The more money you open with, shows the seller you are a serious buyer. The second area is the up front out of pocket cost when buying a house in California. These cost will included the earnest money deposit, the credit report fee, the appraisal report fee and property inspection reports such as (these are not required but recommend), home inspection report and a termite report (a termite report is required on VA purchase home loans in California). Other inspections if elected by the buyer to pay for can include a roof, foundation, mold, well and septic reports. The cost for each inspection will range from vendor to vendor.These inspections on non-refunded, these are paid to third party vendors. The seller, real estate agent and lender do not have control over the outcome of these reports, once the inspection is complete and report is delivered to the buyer(s), the fee is non-refunded.The third area is the cost of buying a house in California are the closing cost. The closing cost will consist of four areas; lender fees, escrow fees, title fees and the buyer's pre-paid fees. The lender fees will include but not limited to the processing fee, underwriting fee, flood certification and additional credit report fees if supplements are needed.Escrow and title fees are other cost associated with buying a house. These fees are paid for at the time of closing and will differ from vendor to vendor. Escrow will be the service provider to receive and distrust funds to all the appropriate parties. Title will ensure your property you are buying is clear from any and all liens at the time of closing and they are the service provider that will record the new Deed of Trust with the local county recorder's office.The last set of fees will be the buyer's prepaid items such as per diem of interest, home owners insurance for one year, impound account of the property taxes and homeowner's insurance. The fees will vary based on the property type, purchase amount and loan amount. Note: The Conventional purchase home loan program with 10% or more on the down payment does not require the buyer(s) to have an impound account. Even though there are down payment assistance home loan programs for buyers to take advantage of and the seller(s) if elected can pay up to a certain percentage of the buyer's closing cost. This can help in a buyer's market where the sellers can assist with closing cost, a little tough to get when we are in a seller's market. This is the reason to plan ahead when you are looking to buy a house in California so that you can save as much money as you can to contribute towards your home purchase. Check out some down payment assistance home programs in California HERE and I welcome the opportunity to discuss these programs with you. The cost to buy a house in California can be affordable and may surprise you how much you may need or my not need to own a home. You will never know until you explore your options on what it the cost will be to purchase a house, I welcome to explore those options with you on how and where we can locate some funds to buy a property of your very own. We can break down the 3 areas to ensure you have the required funds to buy a house in California.One of the top answers surveyed by potential home buyers was, "What is holding you back from buying a house", this was the number 3 answer, "Do not know how much it will cost to buy". That is why buyers need to speak with a licensed loan officer in California to see what the income, credit and cost will be to own a home.How much does it cost to buy a house in California? You never know til you start to explore your options and begin your path of homeownership by contacting me directly via call or text at 909-503-5600 or email me HERE to get started. I look forward in speaking with you.