Buying Your First Home

Buying your first home is now a no brainer according to CNN.

What I have found to be the case is that the majority of would be Sonoma County first time homebuyers generally know that purchasing a home today is a smart financial move. There are several things to consider in order to get the best Sonoma County mortgage in order to purchase a home. One of the biggest challenges Sonoma County first time homebuyers have is coming up with a down payment. In order to get the best Sonoma County mortgage loan, 3.5% of the purchase price is the amount of down payment needed. So on a $300,000 house that is $10,500 down. For folks who don’t have this kind of money lying around in their bank account the next best place is their company 401(k). Lots of companies are willing to help their employees purchase their first homes’ b

y taking out a small portion of their 401(k) plan for a down payment. A down payment is absolutely necessary to purchase a home in Sonoma County and get the best Sonoma County mortgage loan. The next best solution is having a conversation with mom and dad or the grandparents. The down payment could also come in the form of a gift.

The best Sonoma County mortgage rates are available for those buyers who have their financial house in order. What I mean by that is the best mortgage rates are available for buyers that have all of their bank statements, pay stubs, and financial documentation ready to go for the lender to begin the process of obtaining a home loan pre-approval. Lots of buyers today begin looking at houses with a real estate agent, when they are really not pre-approved. Affordability is by far the most important component of purchasing the first home. Getting pre-approved is the first step in securing the best Sonoma County mortgage loan. The next step if you don’t already have a realtor is to find one you can trust and one that will put your needs first. I cannot stress how important this is. Your realtor should be someone who has experience who can negotiate aggressively on your behalf. This person should also be in constant contact with your Sonoma County mortgage loan lender to make sure the loan process goes smoothly, moreover that they will work well together for your benefit. Purchasing a home using a Sonoma County Mortgage Loan is probably the largest financial transaction of your life this far, and should be done with somebody who knows what they are doing. I only work with the best agents and I will be happy to make recommendation to an outstanding realtor for you.

In buying your first home, the next couple of things you need to be aware once you are officially pre-approved is the the appraisal, pest report and home inspection report.

Most Sonoma County mortgage loan lenders would recommend getting all three reports. The only report that is required to obtain local mortgage financing is the appraisal report. The cost of the appraisal is $450-$500, but most the time cost usually ends up being right around $450. The reason the Sonoma County mortgage broker needs an appraisal is determine the value of your property you are purchasing with the Sonoma County mortgage loan. You’ll want to make sure the value of the property is the same as the purchase price negotiated by your realtor (buyers agent) and the listing agent (seller’s of property’s agent). If the value of the property comes in over purchase price you are green, in other words you would be purchasing the property going in with equity. This is good. Now let’s say the opposite happens. Let’s say the appraised value is lower than the purchase price. This means you have two choices. You can choose to pay the difference between the purchase price and the appraised value if you really must have that house or you can go back to your realtor and have them renegotiate the purchase contract to reduce the purchase price to the appraised value.

The benefit of purchasing a pest report is to figure out how much work needs to be done and what condition the house is actually in. You can speak with your realtor more about this. However, you will want to make sure your realtor does not include a copy of getting the pest report in the purchase contract. This is because the lender’s underwriter will require all pest report work to be complete before allowing your Sonoma County mortgage loan to fund. You can always give a telephone call to Scott Sheldon Sonoma County lender about this too (707) 217-4000. The inspection report is also used to determine the condition of the property and make you, the buyer aware of any potential concerns or hazards that may or may not need to be repaired.

Because of the Sonoma County mortgage market and the overall tightening of lending due to an abundance of risk in the marketplace there are a few small items you should be aware of when making offers. If the house you are making an offer on has been owned less than 91 days by the seller and you are using an FHA insured Sonoma County Mortgage Loan to purchase the property, know that you will either have to write a longer purchase contract with your realtor or wait until the 91 days is up. This is a federal requirement on all Sonoma County FHA insured mortgage loans.

Another big factor is making sure that either you have enough money in the bank to pay the closing costs associated with purchasing the home or that you and your realtor will negotiate that into the purchase contract and request the seller of the property to provide a credit (% of the purchase price) to cover your closing costs. You see when you purchase a home, there are fees imposed mostly by insurance companies aka title/escrow companies to make sure everyone the transaction is treated fairly and ethically. These title fees are itemized for your review, however they are a factor of the transaction and they must be paid someone. The most important thing they do other than acting as an intermediary is that they make sure the property you’re buying is free from any clouds on title. Simply put, they make sure the property you’ll be buying comes with a clean slate.

Buying your first home means you will see properties on the market which are owned by banks, or distressed homeowners.

These parties are often very eager to sell because the longer a house sits on the market, the more carrying costs the seller is going to incur ( ie mortgage, tax, insurance payments). Make no mistake you as the Sonoma County first-time home buyer are in the driver’s seat. It is your show and sellers of real estate know that. They are eager to sell, you want to purchase their property, you ask them for a credit to pay the closing costs which benefits you because it mitigates your cash to close escrow, and it benefits them because they get to sell a house faster. The amount of closing costs typically will vary from house to house, but in general 3% of the purchase price is a good measure to use when calculating how much these closing costs are going to be. If we go back to our $300,000 house for example we are looking at a seller contribution credit of $9000 to pay your closing costs.

During the process to obtain the best Sonoma County mortgage rate, it is highly advisable to get your Sonoma County mortgage broker any items they need within a 24-hour period of time. These items might be updated bank statements, updated pay stubs, or a letter of explanation about your profile. Doing so in a rapid period of time will enable your Sonoma County mortgage broker/lender to secure the best Sonoma County interest-rate as well as help you purchase your first home within 30 days or less.

The big question “when do we get the keys”? This is the ultimate goal once events are put into motion. Your Sonoma County mortgage loan must fund then subsequently record with the county recorder’s office. Once you learn your Sonoma County mortgage loan has funded and the transaction is officially on record you can get your keys directly from your realtor. You can also give me a call Scott Sheldon Sonoma County mortgage loan lender and check in with me again (707) 217-4000.

You receive your keys and life is grand! This is the point in time where most Sonoma County Mortgage Brokers or bank loan officers move on to the next client. Your Sonoma County mortgage loan officer’s company will sell your loan and within 30 days you will receive a letter from the lender that funded your loan that your mortgage loan has been sold to a new company. That new mortgage company that your loan has been sold to is the new servicer who will be collecting your monthly payments from then on out. If you work with me Sonoma County Loan Officer Scott Sheldon, I typically call you about 30 days out to make sure everything has gone smoothly and all of your needs have been met. My job as a Sonoma County mortgage loan lender begins when your first loan closes with me, because from there it’s my job as your loan officer to proactively make you aware of opportunities to refinance at no cost and save money wherever possible in an effort to help you chip away at that mortgage balance and pay off your home faster.

So if you are a Sonoma County first time home buyer, are in need of getting only the best Sonoma County mortgage rate and are seeking a Sonoma County mortgage loan to purchase a home give me a call Scott Sheldon best Sonoma County mortgage lender at (707) 217-4000. I am ready to serve you both before, during, and after your home purchase. Feel free to ask me for testimonials from happy homebuyers!

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8 Comments

  1. […] That being said there only two ways interest rates can rise. No matter what the media says, or what people say interest rates can only rise in one of only two ways on mortgages in Sonoma County. The first is inflation. Inflation being defined as the rise of the costs of goods and services to the consumer. If we have runaway inflation like we did from 1975 to 1981 mortgage interest rates can rise sharply and dramatically. There is a very low probability of that previous inflation cycle ever happening again. The other way rates can rise is during a Fed tightening cycle. Mortgage interest rates in Sonoma County can rise during a Fed tightening cycle. This is when the Federal Reserve is hiking interest rates to combat inflation and slow down a growing economy, like they did for 17 strike hikes from 2004- June 2006, however if the scenario such as that should occur home prices would soon have to follow suit and start rising in value again with appreciation because the economy would be growing. Unemployment would be reduced and job growth would be beefy. Beyond that in either one of these cycles if interest rates are higher your bank account is now paying you higher yields on your money. Your stocks and bonds, 401(k), all of these items are to start generating higher yields if rates rise. Mortgage rates in Sonoma County remain stable to increasing. See this post for more info on buying. […]



  2. […] Sonoma County first-time home buyers this represents anywhere between $30-$70 more per month in mortgage payments when we are already […]



  3. […] The appraisal came back and because the loan was insured by the Federal Housing Administration (FHA), we had some particular guidelines to follow in order to make sure his loan would close on time. […]



  4. […] to have a 640 credit score or better in order to have no appraisal required. When you obtain an FHA insured mortgage you pay an upfront mortgage insurance premium to HUD and you also pay mortgage insurance on monthly […]



  5. […] you considering buying a house? If yes, your monthly debt obligations play at significant role in your ability to qualify for a […]



  6. […] don’t need to earn gobs of money to successfully purchase a home — well, depending on your area. You do, however, need to have enough income left over after […]



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