I am looking to buy my first home hopefully around December this yr & just wanted to know how early should I start getting serious?

Asked by Victor Arroyo, Olivehurst, CA Sat Jul 7, 2012

I am at square one right now. I have not shopped around for any loans or really asked anybody for advice. I've really just been snooping around and looking at homes that are for sale. And what steps should I take first? And my second question is what kind of first-time-buyer programs are there? From what I've heard first time buyers need little to no down payment. I want to put a down payment but I just need to know what the minimum is to know if I'm ready financially. I have 12K saved up but don't want to dump every penny into the house.

Thanks in advance!

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Jim Kapphahn, Agent, Fargo, ND
Thu Jul 12, 2012
Hi Victor,
I would suggest that you get with 2 or three banks and get your pre approval letter done.
This will let you know what amount of home you qualify for and lock in you rates.
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Michael Smith…, , Roseville, CA
Thu Jul 12, 2012

All of us lenders offer just about the same products and pricing. The end result is that 99% of all loans end up being serviced by 1 of about 5 national lenders and will fall into pools for either a Fannie Mae, Freddie Mac or Ginnie Mae (VA/FHA).

Documentation is key to getting your loan approved.
I can certainly walk you through this process.

If you are a first time home buyer with less than a 20% down, you will probably be looking at an FHA loan which requires a 3.5% down payment. Closing costs and prepaid expenses for your loan can be paid via a lender credit (from my company for example to you) and/or a seller credit (negotiated with your sales contract by your realtor).

If you are still strapped, we can also look at down payment assistance in the form of CHDAP (California Housing Down Payment Assistance), which I can also set up for you.

CHDAP is a junior lien that closes behind the FHA mortgage. The rate is 3.25% and is simple interest & deferred for 30 years or when you refinance or sell the property. No payments are required on the CHDAP. It is a "silent" second. However many do prefer to pay the yearly simple interest on the CHDAP but it is not required.

If you would like to speak offline, I would love to meet with you.
I have been in lending since 1994 and funded over $400MM in personal loan production.

My cell is 916-813-4003 and you can email me at broker2banker@gmail.com

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Teri Andrews…, Agent, Auburn, CA
Sun Jul 8, 2012
Hi Victor,

You've actually already passed the first step which is Desire. Now that you know buying a home is something you want to do, the next step is Feasibility, and there is no better place to start than talking to a lender. They can help you make a plan to reach your goal and help you understand what your budget is and what programs will fit your situation. Do meet a lender face to face, I feel this is very important for a first time home buyer. If you don't feel they are answering your concerns go see someone else.

Once you have your budget and know what type of loan you are getting, then you can go to step 3, Action! You can start looking at homes and your agent will help you to find a home that will hopefully fit the loan program you are using, because not only do you have to qualify the home does too. It will have to meet the lenders standards in terms of condition, market value and that is where a skilled and knowledgeable agent will be a great help to you.

In the meantime you can start researching areas and begin to narrow down where you want to be.

Good luck and Happy House Hunting!
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James Tan, Agent, elk grove, CA
Sun Jul 8, 2012
Hi Victor,

I think, my esteemed realtor colleagues have already given you a lot of valuable info.
I would like to refer you to this url :


that has information on incentives given by counties for first time buyers. Often times, they offer silent second loans with low to zero interest rate.

You should definitely ask for 3-4% seller's credit for closing costs, however, you should add this to the purchase price. It is a competitive market right now, with many buyers and very little inventory. You will be competing with other fha buyers, conventional as well as cash buyers.

Good luck.
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Susan Vander…, Agent, Lake Elsinore, CA
Sat Jul 7, 2012
First, I want to congratulate you for planning for December. Before you know it, December will be here! Planning is really the first step. Then, you decide to act on that plan.

You will need to build your team of people who will look at your best interests, not how much they get paid after the sale is done.

From a financial standpoint, "dumping" every penny is not the wisest because you need a cushion for emergencies.

Briefly regarding downpayment:

In 2008, President Bush basically cut all funding to any downpayment gifts that needed involvement from the seller, so these gift programs are no longer available. Each county and city currently has provisions for grants to homebuyers; some go through nonprofit oganizations. Guidelines vary by locale.

could be 0% for VA check VA
3.5% for FHA
10% to 20% for conventional, depending on lender and type of property
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Ute Ferdig -…, Agent, New Castle, DE
Sat Jul 7, 2012
Hello Victor. Thanks for coming back. I just wanted to add that you can also ask the seller for a closing cost credit. There is no guarantee that you will receive it, but you won't get a credit if you don't ask. A 3% buyer closing cost credit is not unusual these days.
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Victor Arroyo, Home Buyer, Olivehurst, CA
Sat Jul 7, 2012
Thanks everyone for the great advice! I'm definitely looking to stay cheap on this house and shoot for anything below the 130K mark. So if what I've heard about closing costs being around 3K is true and I'm looking to put down 3% on a 130K property (around 4K) would it be safe to say that 7 or 8K would be enough to get everything squared away? Also is it better to look for a loan thru my current bank or just which ever one has the most appealing interest rate?
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Donald R. Ri…, , Sacramento, CA
Sat Jul 7, 2012
Hello Victor,,,,My wife Deborah and I are both brokers and have our own company....26 years experience in the Sacramento area selling real estate.


Getting all your ducks lined up by getting qualifiedis the first step. That is good that you have saved $12K. There are several first time home buyer programs out there. We have a lender who knows about these programs and if they are presently funded. Getting qualified means have a good credit score, money to put down and a stable job producing income. We have a good lender who we have worked with for twenty five years. Picking a company which has their own underwriting is inportant.

The other thing is that if you pick a short sale property...they could take some time to close. Starting to look can start right now so you can get an idea what your dollar will buy. We set up email searches
for our client so the can look at property via the internet. We also send you our News on the Home Front newsletter which lets you know how the real estate market is doing as well as economy.

We hope this answers your questions...at least...initially. If you need our help let us know.

Our Best Regardsw,

Don and Deborah Richier
Ad-Vantage Point Realty
916 944-0445
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Cindy Davis, Agent, San Diego, CA
Sat Jul 7, 2012
Unless you are military, your minimum down payment is going to be 3.5% with an FHA loan. Bear in mind that you also need closing costs and need to show the bank that you have savings. It seems to me that you're cutting it a little close.

This the time to consult with a lender, work with someone directly, and put together a financial game plan so you will be ready in December.
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Eric H. Wong , Agent, Albany, CA
Sat Jul 7, 2012
You can start now. Start talking to friends and relatives, looking on Yelp, for agents and lenders they have used and liked. Think of this as the first steps in assembling the team that will work with you to find your first home.

One of the most important first steps is to talk to a lender. After you have gotten a few names, just call a couple of lenders up, and see who clicks with you. Who delivers the information you need to you that is both clear, and not condescending. Even though you are not buying for six months a good lender can give you an idea about what price range you should look in, what your payments will look like, do you have to do some credit repair?

After this you can start looking for a Realtor. Again, call 2 or 3 up, and see who would fit into your team.

It is good to start early. You can get a feel for the market, know your limits, understand the process, and then when you find the right home, you will be able to move quickly and with knowledge.
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Sheila Smith, , Sacramento, CA
Sat Jul 7, 2012
Hi Victor,

If you want to move into your new home by December, then you might want to get started no later than late August-early September. With the current market conditions of limited inventory and multiple offers on many of the homes for sale, it could take you 2-3 months to locate your perfect home. Also, you will need about 30 days, sometimes longer for the escrow period.

You should consult a lender ASAP to look into your credit, employment, and financial picture so that you have time to work out any bugs now and be ready to roll in a few months.

Feel free to send me an email if you want to discuss this further to Sactownsheila@hotmail.com

Sheila Smith, Realtor
Thompson-Brown Real Estate
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Ute Ferdig -…, Agent, New Castle, DE
Sat Jul 7, 2012
Hello Victor. You do want to start by talking to a loan agent about your options (I can refer you to one that is very knowledgeable and knows about first time buyer programs). The loan agent can tell you how much you can qualify for and then you take it from there. You are wise to want to keep some money as a reserve. If you want to be in the house before the end of the year, I would start looking very soon as you may be outbid a few times, depending on what the inventory of available properties in your price range is. The lower the price range, the more competing buyers there are. You may also see a lot of short sales and if you buy a short sale, you'll have to expect that you will be waiting for the lender's approval, which can take anywhere from 1-3 months on average, but it could also take longer, particularly if the seller has more than 1 loan.

Let me know if I can help answer any more questions.

Ute Ferdig
DRE # 01326917
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Rose Cabral, Agent, Davis, CA
Sat Jul 7, 2012
Hello Victor,

Congratulations on looking for your first home, it will be an exciting experience! The first step is doing your research, which you are clearly doing since you asked this questions. While you are doing research you should pre-qualify for a loan. This is important to do early as the loan officer will check your credit and offer advice if you need to improve your score. Improving your credit score can take months so it's good to start early with that piece. Also your credit score will affect the interest rate of your mortgage so it's good to have a high credit score to get a lower interest rate.

Once you have the pre-qualification letter you will have an idea of what price range home you can borrow from the banks. I always recommend to my clients to figure our your own budget and make sure your mortgage payment will be something you can afford.

There are several types of loans out there and a loan officer can explain the different ones. If you have 20% downpayment this is called a conventional loan. FHA has some good loans programs where you would only need 3% downpayment. It's awesome that you already have funds saved up. I also recommend having a seperate emergency savings. It's great to put a downpayment because then your home already has some equity.

I could go on and on about the home buying process but I'll stop here for now. I would be happy to work with you and educate you about the home buying process, feel free to give me a call at 530-217-9537 or send me an email, rose@golyon.com

Have a great day and good luck!
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