Home Loans California & Arizona

When looking to buy a house in California consider this questions at the beginning of the home buying process. Looking to time the market when it comes values and rates is not a good idea. Waiting for both values and rates to come down will only frustrate you in the process of the home buying process.

Consider these questions when purchasing property in California.
  • What is my monthly budget I can afford in terms of a house payment
  • How much money do I need for the down payment, closing cost and upfront fees
  • Where do I want to buy in terms of location
  • Will this be a long term purchase or a short term investment 
  • Do I explore a fix or an adjustable interest rate
  • When I am ready to sell can I resell as easily as I purchased the property
  • What kind of property do I buy a house, duplex, Condo or a Townhouse
  • Do I want to buy house in an area that has a high property tax rate or HOA
These are just some of the questions you need to ask yourself when starting the process of your home buying process. These will be a factor at the very beginning that will determine your decision of owning a home here in California.

The most important step before making an offer on a house is to, get yourself pre-approved to buy a home. This will determine if you have to work on your income, credit or the down payment to be able to begin your house hunt. This process will ensure your loan is in place letting the sellers know you are ready to move forward with the process once your offer is excepted. 

Let's explore each of the 8 important factors when starting your home search that will determine when, how, what and where you buy.

What is my monthly budget I can afford in terms of a house payment:
If you are paying rent at the moment, then you know what your budget will allow for a house payment. You can adjust that budget up or down depending on other monthly debts you have such as auto, student, utilities, credit card debt, etc.

If you are a first time home buyer and living with family or friends, budget around 33% of your monthly income towards a house payment. Starting off with any kind of a higher monthly debt may be a shock because you are not used to it.

In both cases, sit with a loan officer, such as myself to review your income, where we can present you with options on payment. The payment will determine what the purchase amount will be based on what you are looking to put down on the house.

How much money do I need for the down payment, closing cost and upfront fees:
There are home loan programs that require no money for the down payment and others that require as little as 3% to 3.50% down of the sales price. Also, there will be fees involved when buying a house, such as lender, escrow, title and buyer['s pre-paid fees, as well as upfront out of pocket expenses. Click HERE to learn more about the fees in buying a house in California.

The funds to purchase a home can come from the buyer's own sourced funds, gift from a family member, the seller can contribute towards the cost as well or from a down payment assistance home loan program. There are ways to locate and source funds to buy a house, we will need to explore all available avenues to ensure there are funds to close escrow.

Where do I want to buy in terms of location:
You always here from industry professionals, Location-Location-Location. This is very true when starting your home search. This will come into play with job location, family friends, work, school, parks, hospitals, shopping and I think the biggest factor, resell. If this is not your permit residence where you will retire in, then think about resell.

Location is a key factor for every homebuyer, everyone wants to live in a good area and the houses for sell in those areas will be at premium, good when you buy and great when are ready to sell. You may not be able to budget for the good area, but owning property to sell or rent later is always a good investment because values will always go up and down (more up than down) and you will be paying the mortgage down, thus increasing the equity of the house for future sell-ability.

Location of the property can bring additional monthly fees such as HOA, higher property taxes and possibly flood insurance. This is something to consider as well.

Will this be a long term purchase or a short term investment:
Looking at a property for retirement or possibility renting one day is a good long term investment for additional income for renting or having the property paid off when ready o retire. 

Short term can be your first home before starting a family, job re-location or starting your real estate empire to buy and flip. 

Try and have a goal on the length of owing a house because this will determine the kind of financing and down payment you start with. I know we can not predict the future, but start the path towards homeownership because this history has the biggest return on investment. Yes there are ups and downs in real estate, but investing in safe real estate returns more than the stock market. You have to live somewhere and that somewhere should be something you own.

Do I explore a fix or an adjustable interest rate:
I believe in fix interest rates over an adjustable rate, rather you are looking for a short or long term investment, fix rates are the way to go. You can obtain (need to qualify) a shorter fix term with a 10, 15, 20, 25 year. Knowing what your monthly mortgage payment will be is less stress then having an adjustable rate.

The adjustable is also good if you know how to manage it and you know for sure that buying the property will be a short term investment. These are for seasoned homebuyers knowing the risk with adjustable rate mortgages.

Even though the adjustable rates are lower, I like the fix rates knowing that the principle and interest payment will remain the same throughout the term of the loan. Even adding more to the payment will be applied to the principle balance thus paying the loan off earlier and saving on the interest part of the balance. 

When I am ready to sell can I resell as easily as I purchased the property:
If the property is easy to find financing on than you should be ale to sell to another qualified buyer just as easy. Location of the property can also play a factor in re-selling, such as, each county will have loan and income limits when financing with traditional loan programs available through FHA, VA, USDA and Conforming.

Location can determine how you will be financing the purchase of the property. Is the property in an area that will limit traditional financing because of the county loan limit? This will hold home prices down because the vast majority of buyers may not have the means to buy a house over the county loan limit.

Also, look what is around the neighborhood, like what kind of commercial buildings are around or may be going up in the future, will there be additional growth in the area that will cause more traffic, etc.   

What kind of property do I buy a house, duplex, Condo or a Townhouse:
Property type will play a big factor in determining what to buy. Single family detached homes will be the easiest to finance as long as the property is lending and meets health, safety, soundness and security issues which goes for all property types. 

With a duplex purchase you may need to come in with more of a down payment which will be determined by what home loan program you decide to move forward with.

Condos with respect to the other 4 property types is the hardest to find financing because, not just the unit itself needs to be lending so does the whole entire complex. So you have a hard time finding financing for a condo purchase,t hen when you are ready to sell, the next buyer may have a difficult time as well. Not saying this can not be done, it certainly can, just may push you to a different home loan program to close the purchase.

A free standing detached Townhouse will be a great starter or retirement home because the maintenance of the exterior is handled by a property management company and this type of property is also easy to finance when detached.

Think about the property type as a factor when starting your home search, because this may push you towards a particular loan program over another.      

Do I want to buy house in an area that has a high property tax rate or HOA:
Looking in a new area may bring a higher property tax rate than an older area here in California and the reason is the additional Mello-Roos tax. With the added property tax fee and/or monthly HOA can adjust your budget to purchase a lower priced property.

Buying a property zoned as a PUD (Planned Unit Development), Condo or Townhouse will add the monthly HOA to the qualify factor in terms of payment and debt to income ratios.

Purchasing a new home verses an older may carry those additional higher property taxes that also will factored in the monthly mortgage payment and qualifying debt to income ratio which will adjust you buying power. 

So before making an offer on a property, let's explore these 8 factors before beginning your home search. Start your home buying process off on the right foot by falling these important steps HERE when qualify for a home loan. I welcome the opportunity to assist with your home buying process. Please call me direct at 909-503-5600 or email me at Nathan@NathanRufty.com. I look forward in hearing or meeting with you and discussing your goals of buying a house in California.
Posted by Nathan Rufty on December 12th, 2015 11:28 AM
Buying a house in California is always a good time and what better time than now. Purchasing a home in California is a long term investment with advantages. 

When looking to buy a house in California, explore all your options whether it is your first, second or multiple times purchasing property, you should think long term. This is a home, where your family can start, grow or expand and start new chapters in your life.

It is always a good time to buy real estate in California, yes values go up and down. That is where the long term investment plans a key role in your decision to purchase. Whether you buy at the height or the low of the market, you will always gain equity in the property because the values will increase and you will be paying your loan down month after month.

I speak with homebuyers in California daily and I hear a lot of reason to buy now or wait. The ones that buy now, always come out ahead than those who wait. The ones that wait and call me after a year or two, always say "I should have bought last year" or I should have bought when I first spoke to you."

Not everyone is in the position to buy a house now, due to credit, income or down payment. Those buyers, taken the proper steps will be homeowners one day. Always give yourself a reason to speak with a loan officer in California about your desire to purchase a home. The best thing can come out of it is, you will know where you stand when buying a house. If you can not purchase now, than you will at least know what you need to do in the future to be in the position to one day own a home.

I know advise from family, co-workers and friends are valued but speaking with someone that is in the business and stays abreast of the every changing lending guidelines will be your best resource. As loan officers we need stay informed of guideline changes and new products that come to the market where we can inform and educate our borrowers of the new developments. I do not speak to my friends who are in construction about my medical issues, that is what my doctor is for.

The reason I support you buying a house now is, when you set a budget on how much you are willy to spend towards a mortgage payment each month and you can purchase because you meet the income, credit and down payment requirements, then what is stopping you from buying a home in California? Is it fear, is it lack of knowledge about the home buying process or you think you do not qualify because of something you heard from another person? 

That is why you need to speak or sit down with a mortgage loan officer and discuss your needs and goals of owning a home. The process of buying a home in California is not that difficult when working with the right licensed knowledgable loan officer that only has your best interest in mind. I have been in the home loan business since 1988 and have assists thousands of people purchase and refinance real estate in California. Over those years one thing remains consent, those who bought real estate on a fix rate mortgage seem to come out ahead that vast majority of the time than those who could not or should have bought a home because the lack of the 2 items, credit and income.

Real estate by far is one of the safest investments you will buy in your life time, because you will always month after month will be reducing your balance. Yes you have the ups and downs, but if your mortgage is a home fix rate, then you will not have the fluctuations in the payment. The stock market losses and gain in such dramatic swings you can loss more than you gain. Look at the vast majority of wealth in our county, if you were able to look at their portfolio of investment, I can bet you more than 50% is invested in real estate.

You do not have to have a truck load of money to buy a house, there are programs like VA and USDA that are 100% financing, no money down purchase programs. With available down payment assistance home loan programs in California, FHA and Conventional home loan programs are still an option to own a home. 

if you are trying to time the market on when  to buy a house, guess what you will loss. That is why Las Vegas has the money and you don't, do not gamble when purchasing property, just do not. In the long run you will come out a winner because you set a budget and a goal with yourself and your loan officer on what you are looking for when exploring your options to purchase a home.  

After 23+ years in the mortgage business, I meet incredible people that I had the privilege of working with and I treat my clients the way I would like to be treated. Sometimes the truth hurts when someone tells you, "You can purchase a home at this time". Believe you me, I do not like saying that to anyone. But once we set a plan so that one day you can buy a house in California, you will be in a better situation to afford a home. That is one of the main goals, once you are able to buy a home, you continue to own that home til the day you pay it off or sale it and made a profit. You are not looking to purchase real estate to one day loos it through a short sale or worst a foreclosure.

I welcome the opportunity to work with you and explore all options so that your goals and budget are meet when looking to buy a house in California. My goals is to make the process of purchasing a home as smooth, stress free and enjoyable as I possibly can. Connect with me HERE or call or text me direct at 909-503-5600. I look forward in speaking with you very soon. 
Posted by Nathan Rufty on September 6th, 2015 1:20 PM



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