Being a First Time Home Buyer, there are many questions you may have. As your Agents Of Possibility, we have dedicated these pages especially to you, the First Time Home Buyer! We are here to assure you anything is possible and we will assist you in making an informed decision about buying your first home, the home of your dreams. We want to help educate you on the process and provide you with the programs available to the First Time Home Buyer! Take a moment to download this worksheet to help you identify what is important to you in your home search. aopworksheet Please save this form and provide it to your Agent of Possibility so we can assist you in finding the home of your dreams!

Find out about the $8000 tax credit available for First Time Home Buyers, the Neighborhood Stabilization Program for San Diego and the First Time Home Buyer Mortgage Protection Plan sponsored by the Calfironia Assocatuin of Realtors and the Housing Affordibility Fund.

Common Questions from a First Time Home Buyer

Why should I buy instead of rent?

Great question. Buying a home is an investment. You write a check to a management company or the landlord and that money is gone forever! Sure it provides a roof over your head, but you are limited! You are unable to make the home yours with your own personal style. As a first home home buyer, you are able to create the home of your dreams! You are able to write off the interest you pay on your income taxes, which will save a lot of money every year. In addition to the interest, you will also be able to write off the property taxes which is an additional savings. In addition, historically over the long term as with any investment, the property will increase in value. As a first time home buyer you will want to make payments of principal and interest, which allows you to pay down your mortgage and creates equity in your home. The equity you gain will enable you to purchase a larger home later in life or just save for your future. Today is a great day to invest in your future!

I have heard that it is hard to get a loan if you do not have perfect credit.

Lets discuss this. Yes, loans are harder to come by these days due to the “Mortgage Meltdown”. However, the cause of the meltdown was how easy it was for anyone to get a loan. Borrowers did not have to qualify. In qualifying, I mean the borrowers were not required to provide income documentation to show they were able to afford the homes they were purchasing. In addition, lenders were bending the guidelines on credit requirements or finding investors to purchase loans given to borrowers with poor credit histories. Today, we are back to the traditional underwriting guidelines, which requires borrowers to provide income documentation for the last two years, verification of assets, and review of credit history. Most lenders are allowing borrowers to obtain an FHA or VA mortgage with credit scores as low as 620. While neither HUD nor VA have minimum credit score requirements, lenders have imposed a requirement. Both FHA and VA loans are available to borrowers that do not have any traditional credit history. Traditional credit being credit cards or auto loans. They will allow you to show your ability to make payments in a timely manner by documenting payments made to landlords or utility companies. For more information on loan requirements, please visit the contact page and we will be able to discuss this in detail.

I don’t have any money for a downpayment, what do I do?

As a first time home buyer, there are options available to you in this area as well. FHA loans will allow a gift of a downpayment and closing costs from a family member. VA loans (eligibility required for VA loans) will finance up to 100% of the value of the home. Closing costs may also be received as a gift from a family member. Conventional financing will allow a gift of 20% of the value of the home with none of the funds being the borrowers own funds. (I know, this one is a hard one!) There may also be programs available in the specific community you are looking to buy in that would assist in this area. Contact us for additional information about down payment assistance for first time home buyers.

Should I use a Real Estate Broker?

It is best to use a Real Estate Broker in your home buying process. The details involved in purchasing a home can be extremely overwhelming. By using a Real Estate Broker, or better yet, Your Agent of Possibility; your questions are able to be answered before you even know to ask them. A good real estate professional will be able to guide you through the process and make it much easier. Your Agent of Possibility will be able to assist you in understanding the neighborhood and help you determine what you are able to afford. Your Agent of Possibility will have access to many properties that come available that may or may not have signs posted. We will save you hours of time driving around looking at potential dream homes. We will be able to provide you with detailed information on properties that meet your goals . Many times we are able to provide pictures or virtual tours of the homes for you to see prior to actually viewing the home. Your Agent of Possibility will be able to structure the deal in the best possible way to save you time and money. As professionals, we will be your guide to the closing table, answering all of your questions in language you will understand. We will be there even after the transaction has closed, to answer any questions or point you in the direction of the nearest home improvement store!

In a nutshell:

You have come this far, you have determined it is the right time for you to buy a home. As a potential First Time Home Buyer, here is a short list of things to think about while creating the vision of your new dream home:

1) Decide on a community. Determine which neighborhood will best fit your needs for your family, for your commute and for your sanity! Your Agent of Possibility will be able to provide info on local school districts, community resources, affordability and tax liability.

2) What to think about when looking at homes. Is the home big enough for your present and future needs? Does it have enough bedrooms and bathrooms? How is the floor plan? Does your furniture fit? Is the yard big enough for the dog, the kids AND the new pool? Is the home structurally sound? What are the maintenance costs and will there be anything you need to replace in the near future? Your Agent of Possibility will be able to help you with many of these items. You may want to keep a list or copies of the MLS listings on the homes you have looked at so you can go back and review your comments about the home.

3) You found your home! How do you make an offer? Your Agent of Possibility will help you put together an offer. We will also provide information you need to know about an earnest money deposit, the legal description of the property, how much to offer, how long the offer is good for and the proposed move in date. Your AOP will also assist you in picking a lender and the financing options available. It is best for you to submit a prequalification letter with your offer. Your Agent of Possibility can recommend a few different options for your financing needs. You will also need an insurance agent for homeowners insurance. Consider using the agent you have your cars insured through, as many times this will provide discounts for both home and vehicles!

4) Now what? Your Agent of Possibility will help you in the next phases of the transaction. You will want to schedule a home inspection. An Inspector is hired to check the safety and soundness of your Dream Home. The inspector will take a look at the plumbing, electrical, heating and air, windows, doors, structure, water heater and roof. They will provide you a report with all of their findings. Be sure and hire an experienced and qualified home inspector. It is a good idea that you are there for the inspection, as you may have questions answered at this time. This may not be a job for Grandpa Joe, unless he is a building inspector! Referrals are available, just ask! There will also be a termite inspection done on the property. This inspection is usually paid for by the seller and provided to the buyer and buyers agent once complete. If there is any work that needs to be completed, your Agent of Possibility will be able to assist you in asking for the repairs to be completed.

5) Finding the right loan for you. Your Agent of Possibility will discuss the many options available to you in choosing a mortgage. If you received a prequalification letter, your lender should have most of the things needed to get your loan approved. The lender will need to order an appraisal on the property, but this is not something you need to be present for. Once this is received and all escrow and title documentation has been provided to the lender, they should be able to provide final loan approval! One step closer to closing!

6) The final walk through! Once you have reached this point, you are days away from owning your dream home! This step is for you to walk through the home one final time to ensure all is as remembered and that all the appliances or doors have not walked out since your last visit! Be sure and mention any concerns to your Agent of Possibility to have them resolved prior to closing.

7) Signing of documents. Once you have final loan approval, the lender will send the closing documents to the escrow company for your signatures. These documents are important, as they spell out the terms and conditions of your new loan. It is important you read and understand these documents, as you are making a commitment to make payments on a property for 30 years! Your Agent of Possibility will accompany you to the signing, and will be there to answer any questions you may have. Be sure and get copies of all documents you have signed, most importantly the note, deed of trust, truth in lending and HUD I Settlement Statement.

Closing Day! California is different than most other states. Closing in many other states occurs the day the loan documents are signed. That is not the case in California. Once the documents are signed, they are returned to the lender for their review and once the lender has approved the Settlement Statement verified signatures and confirm the property is insured, they will determine the day they will wire the funds to the title company. This usually occurs one to two days after they have received the documents back from escrow. The day the money is wired, the Deed of Trust will be sent down to the county recorders office for recording with public record. Most times the document will record the same day, but there are instances that it may be the day following the funds being wired. Once the escrow company has confirmation of recording, they will notify your Agent of Possibility, cut checks to the seller and the keys to your new home are on the way to your key ring!

CONGRATULATIONS! YOU ARE NOW THE PROUD OWER OF YOUR DREAM HOME!

Home ownership

Home ownership is the American Dream. As your Agents of Possibility, we hold ourselves accountable to ourselves and each other in representing our moral and ethical duties in every transaction. Our mission is to exceed the industry standard and build our relationships with the intention of keeping our clients for a lifetime. We have your best interest in mind. Your home is not only a financial asset, it is a place where you are going to create a life. It is a place you feel safe, where your kids call home. It is a place for you to build a future and be a part of a community.

Knowledge is the key to opening the door to your new home. We are here to help you understand the process, answer questions along the way and be a part of your dream of home ownership!