Before you think about buying that home, get familiar with the home buying process. You have to read up on the buyers plan, where to get buyer assistance, mortgage loans and rates, and most of all, how buying a home will affect your life style. The 100% no down payment loan does not include the Closing Cost so have another 3% or more set aside for this. You have to know how to avoid little mistakes that could cost you thousands. How the taxes and insurance will grossly affect your monthly payments. If you don't have at least 20% down, you'll also have to pay monthly PMI Insurance. Some rules to follow:

Don't make the same mistake most homebuyers make, or you'll pay plenty for it. 

• Don't let emotions rule, that's the faster way to empty your pockets.  
• Always take a visual in-depth look at the property, does it have resale value, if not, walk away.
• Don't let some pushy agent influence your decision, they're not buying the home, you are. 
• Don't fall for the "Your monthly payments are only this low affordable amount" or "Why pay your landlords mortgage payments". This amount does not include your taxes and insurance, and you could be looking at foreclosure within a few months. Be very careful!
• Be very suspicious of interest only loans. You're not building any equity with these loans and if there is a bubble burst, you won't be able to re-finance. 
• Watch out for the new proposed tax laws regarding the tax deductions.

Do your homework. Knowledge is power. Tremendous information is available on the Internet. There is no excuse for entering the market unprepared. This could be your biggest investment. You should know what you're doing before you do it! 

Before you start, Get a Realtor, don't shop without one!!!!!

Don't be alarmed at the price. Have your realtor give you a fairly accurate estimation of the monthly payments, including the taxes and insurance. You'll know what you can afford. Take the cost of renting and compare it with the cost of home ownership. Renting only pays your landlords mortgage payments with no return for you, whereas home ownership returns a tax benefit, building home equity  and appreciation. Owning a home of your own is an automatic savings plan.

Don't expect to get what you're looking for. Almost 80% of home owners started with a home that they really didn't want, for one reason or other. But, they wanted to get established as a home owner and to get the tax benefits and the home appreciation and resale value. Most new home buyers seem to think that the exact home their looking for with the price they can afford will eventually come on the market. This will never happen. The price of homes won't come down and if they should it would only be about 10% to 15%, still out of reach for most buyers. You are really forced into buying a home that somewhat meets your needs, but with a little imagination and work, you can create something that another new buyer would appreciate. If you can't afford a home now, start saving, or can't find the home you're looking for, six months to one year from now will only put that home out of reach. 

Do you have several credit cards? If you owe more than $7,000 in credit card debt and you make the minimum monthly payment, it'll take you 61.7 years and $20,000 in interest to pay off the debt. Get rid of or payoff all your credit card debt. Lenders don't want to work with borrowers that have a lot of credit card debt and a lot of credit card usage. If you pay the full balance every month and you have more than two credit cards, get rid of the cards that charge the highest interest rate. More than two cards will have a direct affect on your FICO score. Want to check out your Credit Card Payment Time Table?

You can't have one without the other. Most buyers fail to realize that you have to be pre-qualified or better yet, be pre-approved for a mortgage loan. Shop and compare, there are some lenders who are willing to negotiate fees. Know what type of loan you need and the going interest rate. You can buy-down the rate in order to lower your monthly payment. Don't take a 30 year fixed loan if you are only going to reside in the home for 3 to 5 years. Make sure that you get a letter from your lender stating the loan amount that the lender is willing to commit. When making an offer on a home, you may be asked for this letter.

The Mortgage Rate: You should shop for the best mortgage rate. Examine all of the available lender mortgage program options. Check the different mortgage loan rates and types that fits your budget. Interest costs will be your highest single cost of owning a home. Calculate your monthly payment when a lender quotes you the current interest rate. You can compare the mortgage rates, closing cost, points and the mortgage lenders at the Mortgage Center. Remember, Taxes and Insurance are not included in your mortgage payment unless you have requested them to be included. These could increase your monthly payment by $400-$600.
(Taxes = 1.25% pre thousand, Insurance = .0035% pre thousand)

Check the MLS: You should always check the MLS first for properties in the areas that you want to review first. This will give you some idea of how much of home you can afford and how much home you're getting for your mortgage loan. Always have something to compare with because this will save you a lot of time and effort.

Safe Neighborhood: Check to see if there is adequate lighting, neighborhood watch signs and the like. You can check with the local police and next door neighbor and also  www.meganslaw.ca.gov free website.

Trying to make a shrewd investment. People need to buy based on what fits their family. Don't try to guess what will happen to the market.

Determine how much of a home you can afford.  Make a work sheet and total all monthly net income (after taxes, insurance, 401k contributions and whatever other deductions that you have) and all monthly debts including your monthly rent or mortgage. Now subtract debts from income, the result should give you an indication of how much you can afford. Stick to it! Don't plan on buying a new car any time soon. Check the credit card issue above.....

Don't cramp your life style. Buying a home not only drains your monthly budget, but also you're cash short for things you use to do. Remember, you also have to pay for utilities, services and occasional maintenance projects. The mortgage rates are low but the Foreclosure Rate is high, something to think about. 

For Sale Signs: Be careful when you see a For Sale sign. Most For Sales signs have a rider just under the sign or on the top of the sign. If this rider reads 'Coming Soon' beware. The listing agent is trying to create an air of urgency among buyers, start a bidding war, get buyers to compete with one another. Don't fall for it. If you happen to talk with the listing agent, have your realtor ask when offers can be submitted. If the listing agent gives a date in the future, beware, this also starts the bidding war, and eventually will drive the price up. 

Insist on a Home Warranty: You never know when a dishwasher may break down, or the oven doesn't work, or the toilet leaks or the A/C or Heater stops working, or the garbage disposal doesn't work, or the water heater breaks down, who's going to pay for the repairs or replacements? 

Negotiate with the owner for a Home Inspection. Some problems won't be discover until it's too late. The problem could of been there from day one, but no one ever noticed or looked for it. Some of the biggest problems are either under the house, in the attic or around the foundation. If problems are found, you can walk away or renegotiate the asking price. 

Inspect, inspect and inspect. When viewing a home, look at the window sills, look under sinks, look at the clothes washer and dish washer hook ups and look in the bathroom for water damage. Look for cracks in interior and exterior walls for evidence of water leaks, insect (ants) passage ways into the home. Check every corner and look for rust spots and mildew, check every door to make sure that the door closes properly, look for uneven flooring, check electrical switches, never know what you'll find. Don't blame your agent, it's up to you to do some investigating on your own. 

Check all disclosure reports. The listing agent has completed all the disclosure reports based on a physical inspection and or by statements made by the seller. In most cases, the seller will acknowledge that there were problems and these problems were corrected, however, some sellers will not admit any knowledge of  problems. 

Title Insurance: Title insurance is an insurance policy issued by a title company which is intended to protect the purchaser of real estate against loss if the title to the property is flawed. A title report discloses the current ownership, easements, restrictions and liens relating to a particular property. This report is normally prepared by a title company prior to issuing a title insurance policy. A preliminary version of this report is known as a preliminary title report.

Real Estate Escrow: A real estate escrow is a typical part of the purchase and sale of real property. It allows a disinterested third party (an Escrow Holder) to hold funds and conveyance documents received from the buyer and seller until the close of the transaction. If all requirements of the transaction have been met, then, at the closing, the Escrow Holder delivers the written documents, evidence of title, money or other thing of value to the appropriate parties involved in the transaction.

Dual Agent: Stay away from Dual Agents AKA Listing Agents acting on behalf of the seller. If you don't have a realtor, get one! This is one way of losing control for negotiation's and it could cost you thousands.

Not getting what you want because you're impatient. This is a big decision. You need time. Impatient decisions can lead to mistakes.

Waiting for a better market and interest rates. Warren Buffett says the rear view mirror is always clearer than the windshield.

Choosing a poor location. Even within a neighborhood, location matters. Is it on the busiest street? Is there a shopping center out the back window? You can avoid this by making a Wish List. Write down the things that you must have, things that are nice to have and things that you don't want.

Overlooking an inferior floor plan for an attractive exterior. It may have gorgeous curb appeal, but you don't live on the lawn. No matter how attractive the exterior, you need a livable home.

Not buying at all. If you can afford a home and you don't make that purchase, you'll lose the benefit of tax deductions, building home equity and the appreciation in value.

Ready to get started? Just fill out our Buyer Application and see what we can do for you.

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