Ten Tips for Buying your First Home

Here are 10 Tips for Buying Your First Home

1. Before you look, call a great lender.
   You need to know how much of a loan you will qualify for and how much your monthly payment will be. You want to be delighted by the home you fall in love with, not disappointed that you can't afford it.
   
   
2. Fix your bad credit.
   Again, rely on a good lender to advise you on ways to raise your credit score. This could take some time, so be sure to check your credit well in advance of your home search.
   
   
3. You may need a down payment.
   Don't be caught unaware that you may need a down payment depending on the type of loan. There are some first time home buyer programs in San Luis Obispo County which may assist you with your down payment.
   
   
4. You will need funds for closing costs.
   Closing costs are service charges you have to pay for in completing the sale. These include:
   • Escrow fees for processing the transaction
   • Title insurance charged by your lender
   • Mortgage insurance if your down payment is less than 20%
   • Homeowner's insurance
   • County Recorder fees for recording your deed
   • Loan origination fee
   • Loan discount points
     
     

1. Consider “Points”
   A point is a fee charged by a lender equal to 1% of the loan amount. Usually points are charged for a lower interest rate. It is important to shop around a little to make sure you are getting the best loan package for your financial situation and life plans.
   
   
2. Mortgage rates can be fixed or adjustable
   With a fixed rate mortgage; you will know what your monthly payment will be. With the adjustable rate mortgage, your payment will be fixed for a set amount of time, but then it will readjust depending on the current going interest rate. The adjustable rate mortgage may work for you if you plan on owning the home for a short period of time. The fixed rate gives you stability over time knowing what your payment will be.
   
   
3. There are two main types of loan categories
   Conventional Loans
   Conventional loans are available with fixed or adjustable rates. Mortgage insurance may be required.
   Government Loans
   These types include FHA, VA and USDA loans. Typically these loans have a fixed interest rate.
   
   
4. If you are a low to moderate income first time home buyer, there are special programs to help.
   Sometimes available through city, county or state housing agencies. There are also private mortgage lenders. A good local lender will be familiar with the current programs.
   
   
5. You may have to pay mortgage insurance
   If your down payment is low the lender is taking a higher risk. Mortgage insurance gives the lender some protection from potential loss should you default on your loan. Expect to pay mortgage insurance if your down payment is less than 20% of the cost of the property.
   
   

10. Meet with me if you are planning to buy anywhere in San Luis Obispo County, California
After you have done all your homework figuring out how much you can afford, let’s talk about the areas you will most likely find the home you want. I know the markets and I watch for the deals. If you would like to search for property anywhere on the beautiful Central Coast, please use my website, www.slocoproperty.com.

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