The Home Buying Process

When it comes to buying a house, many Buyers do not know what steps to take. Many think they know what price range they can afford and so go looking at homes in that price range.  But sadly, many Buyers get excited about the homes they find in that price range only to find out later that they actually cannot afford such a price range, because of the monthly additional costs of Home Ownership.

So, for Buyers who are just starting the process of thinking of buying a home, I have written down some steps that every Lender and/or REALTOR(R) will have you take before you can write an Offer on the house of your dreams.

Step #1 - Contact a Lender

Many Home Buyers do not want to start here, thinking they are just in the beginning stages and don't want a Lender involved yet, however, this is the first and foremost step to take so that you can know exactly what Loan Amount you can qualify for.  Your REALTOR(R) will want to know that you have spoken to a Lender before you start going into Homes For Sale as well, as REALTORS(R) have seen too many times, Buyers get their hopes dashed regarding the price range they can afford when they have looked at beautiful homes in one price range only to find they cannot qualify for any of them.


Your Lender will want to know:
What is your current income;
How long have you been employed with your current employer;
How much in savings you have;
What your current FICO score is (some information regarding FICO scores are found HERE). 

And remember to shop around when looking for a Lender.  You will find that their costs and the interest rate you may get can vary between Lenders.

Step #2 - Start saving every nickle you have for a good Down Payment and Closing Costs. 
If you want to be a Home Owner this will not be a hard task but an exciting one.  And an important cost to remember is Closing Costs, which many Buyers forget about.  Closing Costs will include the cost that your Lender will charge you for getting you a Loan; Escrow Costs which the Escrow Company will charge you for handling the funds and documents of the process of Buying a Home; your Property Insurance and Taxes; and other miscellaneous costs involved in Purchasing and Closing the Purchase of a Home (a more detailed breakdown on Closing Costs can be found HERE).

Step #3 - Contact a REALTOR(R)

If you want to start looking inside homes that you can afford, a REALTOR(R) will be the best way to help you do this.  Keeping your REALTOR(R) informed about your likes and dislikes, and about any major changes in your job, income, major expenses that suddenly appear, along with location needed to live, etc. will help keep your REALTOR(R) looking in the right areas for you.  And remember that your REALTOR(R) has the most current and up-to-date list of Homes that are For Sale in the area and price range that you are interested in versus the on-line data suppliers which often times are giving information that has not been updated.   Your REALTOR(R) should be out to help make the Home Buying process as easy for you as possible, supplying answers to all your questions in the most easily understood way possible.

Step #4 - Write an Offer and open Escrow on your new Home
This process can be overwhelming to Buyers who are not used to the amount of Paperwork and Disclosures that will be involved in purchasing a Home.  Choosing the correct REALTOR(R) who has a patient disposition from the start and one who is willing to answer every question thoroughly and simply is the REALTOR(R) that you should choose to help navigate you through this sometimes overwhelming and ofttimes, time consuming, process.  

Here is what one client had to say about working with me:

"You were easy going, not pushy, yet knowledgeable, helpful and friendly.  Not only knowledgeable but honest to the point of offering careful and helpful advice".

- Alan L

If you need any help in finding a home to buy in the Santa Clarita Valley or if you have questions about the Home Buying Process, please feel free to contact me directly by telephone, 661-309-2364 or by email, LeeAnnRealtor@yahoo.com. 
It will be my pleasure to make the Home Buying Process as easy, enjoyable, and as understandable as possible for you.  

(C) 2011 LeeAnn Bell

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FHA 203(k) Rehab Loan - a loan to help that "Fixer Upper" you just found

Have you found a home to purchase which you think would be just perfect, if only you had the extra cash to rehab it and bring it up to livable standards?

It can be hard for many to not just come up with a Down Payment for a new home, but add on top of that all inspections one may want to do during Escrow and the additional Closing Costs ... how does anyone have money left over for repairs which are necessary on so many distressed sales?


The FHA 203(k) Rehab Loan could be exactly what you are in need of.  Read below:

Home buyers thinking of purchasing a distressed property in need of repair, but who are concerned that the cost of the repairs could drain their savings account may qualify for the Federal Housing Administration’s (FHA) 203(k) rehabilitation program.

• The FHA’s 203(k) rehabilitation program provides loans for covering renovation costs as well as the purchase price of the primary residence.  Investors are not eligible for this program.  Additionally, similar to traditional FHA loan programs, the rehab program allows for a down payment of as little as 3.5 percent.
  

• A common misperception about the program is that the house needs to be unlivable.  Realistically, the property just needs to be outdated, according to a lender familiar with the program.  The property “just has to appraise below market value and then at market value with the repairs.”
  

• Improvements deemed “luxury” are ineligible; however, the program has a wide range of definitions for “repairs” and “modernization.”  Covered repairs include items such as a new roof or heating system, as well as decorative changes, like replacing vinyl with ceramic tile on the kitchen floor or painting the interior.
  

• In addition to putting down at least 3.5 percent of the current value of the property, buyers also must use a HUD-approved lender, appraiser, and a contractor approved by the lender for the repairs.  One list of approved businesses can be found at 203kcontractors.com.
  

• Borrowers considering the FHA rehab loan program should be aware that loan rates typically run around a percentage point higher than conventional loans, and come in 15- to 30-year terms, either fixed or adjustable.  Additional paperwork for inspection, appraisal, title updating, and the like can increase closing costs by $1,000 or more higher than the average.
  

• For additional information about the FHA 203(k) rehabilitation program, please visit http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm 

  Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide.
  

Contact me if you are thinking of purchasing a home which needs some extra money put into it to become livable.

And if you are interested in finding distressed and/or foreclosed homes in the Santa Clarita Valley, email or phone me and ask to be put onto my DAILY AUTOMATED SEARCH SYSTEM which will send your personal home search criteria directly to your email in-box daily.  (Click this LINK to see an example of a personal Automated Search Page)

No matter where in Santa Clarita you are looking, it would be my pleasure to help get you into a home you will love!

LeeAnn Bell, REALTOR(R)
661-309-2364
LeeAnnRealtor@yahoo.com

DRE License #01260650

Comments Welcome

(c) 2010 LeeAnn Bell