First Time Home Buyer
So you are ready to buy a house. As a first time home buyer, the idea of having to navigate the seas of mortgage financing can feel treacherous and uneasy. Diditan Financial helps the first time home buyer secure the best home loans that offer amazing terms, even if your credit score has a few blemishes. First of all, you need to make sure you are buying a home for the right reasons. Don’t jump right in to homeownership because your friends are doing it, or because it is a buyer’s market. Buying a home will likely be your largest investment, and it requires taking out a mortgage. This is a type of loan for home buyers that allows them to pay off the purchase of their house (usually for 30 years) and it requires financial readiness and commitment. Diditan Financial has a leading team of first time home buyer experts who know how to lead you past all the pitfalls, predatory lenders, and hardships that can surface if you don’t have an expert helping you along the way.
As a first time home buyer you should do your research and discover all the various home loans that may accommodate you in this massive process. Remember when you thought buying a car was a huge investment? Buying your first home makes car shopping look like a cake walk. When you call Diditan Financial our knowledgeable team will show you all of your options, many that the big banks seldom bother to deal with. For example, did you know that you might be eligible to get a Federal loan at a heavily discounted rate for buying a home outside the city limits, or in unincorporated parts of the city? Have you thought about getting a “fixer-upper” at a lower cost and apply for a county grant to make the needed improvements? Our team is dedicated to making your dream of owning a home come true, and with more than a decade of knowledge and executing a superior level of customer service, Diditan Financial has set the bar high, and well out of reach, thanks to our amazing clients.
First Time Home Buyer? Diditan Financial has the Key to Unlocking Your Perfect Home Loan
When is the Right Time to Buy a House?
When it comes to the standard first time home buyer profile, the right time to buy a house is when you can afford it. The most important thing a first time home buyer should examine is his debt-to-income ratio which is also known as a “front-end-ratio” or “housing ratio.” Most lenders operate by the standard rule of thumb that your monthly mortgage payment should not exceed more than 28 percent of your total income before taxes. If you make enough money the next thing you will want to consider is how much of a down payment you can offer. The standard requirement is 20 percent of the total sale price of the home. However, a first time home buyer can apply for various programs that may require less than 20 percent. Just make sure you aren’t in for a big surprise down the road such as a spike in your mortgage rate or payments. Diditan Financial is standing by to answer your questions, and to help you avoid making mistakes in this new endeavor.
Advice for a First Time Home Buyer
One of the biggest mistakes a first time home buyer can make is buying the biggest house on the street. These homes tend to depreciate in value more so than others. Finding a good “starter home” is ideal; a home that is perfect for you and your family now, that you can sell later down the road when you are ready to upgrade as your life evolves. It is also wise that a first time home buyer not plan on making any other large purchases within the same year he buys his home. That said, you will want to make sure your responsibilities are in order, you have a reliable car, and you don’t plan on going globe-trotting or buying a boat any time soon. A first time home buyer will need to ease into homeownership like it is an inviting hot tub; gradually acclimating to the temperature of “house and home”, and the many levels of accountability that must be present. For example, you will need to focus on:
- Making your mortgage payments on time
- Setting enough aside to pay your property taxes
- Pay your HOA fees
- Perform general maintenance of the home to ensure its value is solid
- Perform annual maintenance / inspections on appliances and plumbing to help ward off potential damage
- Create a reserve fund for emergencies
- Pay for homeowner’s insurance
- Make safety upgrades (i.e. security system, new garage door, fire extinguishers, etc.)
Upon reading this if you still feel confident that now is the time to buy a home, then you are undoubtedly ready. Diditan Financial’s team of expert lenders are passionate about helping first time home buyers find the best loan and settle into the home of their dreams.
Tips for First Time Home Buyers
When a first time home buyer sets out to purchase a house, he is embarking down a road that is both exciting, and stressful. You can minimize the stress of buying a new home by adhering to house hunting tips designed to ensure you get exactly what you want. First of all, properties in perfect shape are rare, and they usually command a higher price and don’t stay on the market very long. If you can form a relationship with a contractor who will perform a free inspection prior to your making an offer on a property, you could better determine if the home can be repaired or remodeled to meet your needs and stay within your budget.
- Neighborhood. Before you buy a home, you will want to know what kind of neighborhood its in. Check the walk score, crime statistics, parks and recreational facilities, shops, public transportation, entertainment, and any other things that might matter to you.
- School district. Do you have kids or plan on having kids? If so you will want to make sure you move into a home within a good school district where the education standards are higher than others. Even if you don’t have kids, living in a good school district may protect your home from falling prey to the market’s dramatic ups and downs, as a good school district is great for resale.
- Up and coming. Up and coming areas are excellent places for investing in a property. For example, according to Trulia, the median price of a home in the Echo Park neighborhood of Los Angeles was $689,500 in 2013. Now it is $813,000 and climbing due to the hipsters and the relocation of artists from Downtown’s Art District where housing prices sent people packing. Most first time buyers enjoy eclectic, hip neighborhoods and should pay attention to which neighborhoods are starting to reflect the arts, craft beer, and music scene–all things that make regions attractive and drive up home values.
- Other tenants. In many cases buying a condo or apartment in a building with a high volume of tenants can be risky because the building’s overall value is determined on how well the tenants take care of their unit. Fewer tenants means less risk.
- Space vs location. Living in the city generally means less space. Don’t be surprised if your dollar gets you significantly more in the suburbs.
- Condos. Older condos tend to have more square footage than newer ones, so if space is more important to you, consider an older unit and make modern upgrades. This way you will get the space you want, the look you want, and the resale value will likely go up so long as the remodel is contemporary and universally appealing. Also, you can’t negotiate maintenance fees, and these tend to go up in time.
- Look past the tacky. Do you see popcorn ceilings and sunflower wallpaper? Is there a pink toilet from the 70s? These are things that can be easily changed. Prepare to see junk and tacky fixtures. Your home will be an investment, as well as a place to live, so look at the things that can’t be changed (square footage, location, permits, building materials, etc) and don’t pass up what could be a great home just because the kitchen has green linoleum flooring and matching counter tops.
- Financing. Have your financing ready before you look because properties can come and go in mere hours. You don’t want to risk losing your dream home.
- Home inspection. Get a home inspection before you buy. The last thing you need is to discover a sagging foundation or that the entire plumbing needs to be replaced, along with the roof. A home inspection protects you form financial ruin.
What are Interest Rates for First Time Home Buyers?
Interest rates can be compared to robots: some are set according to tradition and drag the process out in clunky fashion while attracting borrowers with various bells and whistles, while others are more streamlined and help facilitate a speedier payment fulfillment time period. Some first time home buyers may want the “R2D2 of interest rates”, while others may best be suited for the “BB-8 variety”. If you aren’t a ‘Star Wars’ fan and this went over your head, let’s back up: there are a number of loans first-time home buyers can qualify for, and you will want to talk to a Diditan Financial expert to determine which one best suits your needs, and how you can lock in the lowest rate with no surprises attached. In order to paint a clearer picture regarding your potential interest rate, let’s step into the shoes of a specific buyer type: Imagine you inherited your grandmother’s home up in Northern California, and you wish to sell it and use the funds to purchase a home for sale in Los Angeles to be your first property. You are advised to take out a home equity loan in which the property’s value is your collateral used to purchase that craftsman bungalow for sale in Echo Park. Based on your credit history (which is probably not too well defined if you are under the age of 30) you face some challenges in getting a good rate, but because you have the perks of being a first time buyer coupled with the line of credit issued through the equity in grandma’s property, you can slap down a sizable down payment and qualify for a lower annual percentage rate (APR). In essence, your timeframe to repay the loan would be shortened thus making the repayment process faster, like a speedy BB-8 robot versus a traditional 30-year loan with an average APR that is streamlined like a slower, yet faithful R2D2 robot. Your buyer portfolio may be like this one requiring a home equity loan, but in all likeliness it probably isn’t. Our trusted Diditan Financial advisors can pull and analyze the circuitry of your borrower portfolio and set you into the perfect home loan with the best interest rate to make the process as carefree and streamlined as permitted.
What are the Best First Time Home Buyer Programs?
If you are a first time home buyer, you will want to know what programs are out there that may help you get better rates, more favorable terms, and help you live your dream of owning your first house. State and Federal agencies exist to help first time home buyers ease into affordable housing options. When a surge of new homeowners enters the market they stimulate the economy, reduce poverty rates, crime statistics drop, and a number of other benefits exist that encourages the state and Federal bodies to help excel this niche, though it is a very important sector of housing market shoppers. These programs are a win /win for buyers, and lenders.
- CalHFA – Every state has its own programs for residents. If you are a first time home buyer in California, you should be aware of the California Housing Finance Agency (CalHFA). For example, they have some home loan options for moderate to low-income families such as one popular product that offers zero interest rate down payment assistance loans that are unheard of when utilizing a conventional loan option.
- CHDAP – The California homebuyer’s Downpayment Assistance Program (CHDAP) offers a deferred-payment junior loan up to three percent of the home’s appraised value or purchase price (whichever is less) to be allocated for closing costs or a down payment. First time home buyers can even merge a CHDAP with a CalHFA loan.
- SCHFA – The Southern California Home Financing Authority (SCHFA) is a union of authority powers between Los Angeles and Orange Counties that offers first time home buyer programs to low income buyers who reside in one of its counties. Founded in 1988, SCHFA has worked with hundreds of thousands of buyers and families to help them achieve their dreams of owning their own home. One of its most attractive features is a highly competitive 30-year fixed rate loan with a downpayment grant and a grant for closing costs. In order to benefit from this option first time home buyers must work with a lender who appeals to SCHFA which is run by the Los Angeles County Community Development Commission (CDC) and Public Finance Division of the County of Orange.
- Home improvement programs – There are also a number of home improvement programs that first time home buyers may qualify for. The Residential Sound Insulation Program (RSIP) is operated by the CDC and gives grants to homeowners to sound insulate residential properties and rental units from the noise caused by active aircrafts landing in and departing from the Los Angeles International World Airport (LAX). The Single Family Home Improvement Program (SFHIP) helps low-income residents earning 80 percent of the Los Angeles County median income, or less, get funded repairs to their home that includes roofing, heating, electrical, plumbing, exterior painting, and removing code violations, such as windows being placed too high. The home must be located in unincorporated areas of Los Angeles County and assistance is limited to a maximum of $15,000.
Some of these programs require you to do a little work on your own, so do your research and learn about other first time home buyer programs that exist and tips of advice that accompany them. You will also want to check for any stipulations. For example, if you want to apply for CHDAP be prepared to complete a mandatory homebuyer education counseling course and obtain a certificate pertinent for the program’s qualification. There are also income limitations, and various property requirements. When you reach out to our Diditan Financial team we will help you find your best qualifying option, and guide you in utilizing one or more programs to nab the best home loan.