San Marino First Time Home Buyers

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Owning a home is part of the American dream. But before owning a home, you must first buy a home. This guide will give you some background information to hopefully make your home buying experience pleasurable.

Make sure you are not in a hurry to buy your home, especially if it’s your first home. There is a lot to learn and you are a lot likely to not make a mistake if you take your time. Figure on looking at our San Marino MLS IDX homes for sale before purchasing to get an idea on current market conditions.

How Much Can You Afford?

Unless you are one of the few people that can afford to buy a home with cash, you will need a loan. It is very important to have a good and clean credit history, though if you have some blemishes, it doesn’t preclude you.

You will need to pay the down payment and possibly the closing costs out of your own pocket. If you can afford it, it is best to put a down payment of 20% of the purchase price. However, these days, it is easy to find lenders that will let you borrow up to 95% or even 96.5% of the purchase price, so your down payment can be limited.

The mortgage loan will pay for the portion of the house not covered by your down payment. A good rule of thumb is that with good credit, the lender will want the sum of all your fixed payments to not exceed 40% of your gross income. This includes car loans, car insurance, home insurance, property taxes, homeowner association fees, etc. For the purposes of a rough calculation, you can figure 1.5% of the home price for taxes and insurance. If you think you will buy a property in an area that will have a homeowner’s association, count on spending $200 per month for the fees, although that varies greatly.

The purpose of doing the initial calculations is not to get the exact right values, because that is impossible at this point. It is to do a sanity check on what type of home is affordable to you at this point.

It is always best to consult with a mortgage consultant at this time to help you calculate what you can afford, but refrain from applying for a loan just yet. You will want to comparison shop before deciding on a mortgage broker, be careful not to pull your credit report too many times as this will result in a lower FICO Score.

What Type of Property do you need?

You should try to narrow down the type of property you want based on what you can afford. Must it be a single family home, or would you consider condominiums and/or town houses?

The best way to go about narrowing your options is to look at existing homes for sales. Take a couple of Sundays to go visit numerous types of open homes in the area where you want to buy. When you are ready to make that move give us a call at: 626 296-2900