Southern California Home Buying

Buying a home in Southern California can be an enormous undertaking – be sure to retain the services of a qualified Realtor. You can trust our Realtors to always keep your interests first and foremost. We will guide you through the entire home buying experience and assist you in being an informed buyer.

Issues to consider are the features you require in a home to satisfy your lifestyle now and in the future? Determining your range of affordability is essential before exploring your needs, from design preferences to neighborhood choices.

Once you have found the home that is right for you, move forward to present an offer. This will consist of earnest money to be held in an escrow account and a written agreement. This agreement will set forth your terms of the purchase and a schedule of events in order to own the property. This important document is a legally binding agreement and should be carefully prepared by a knowledgeable Realtor who is qualified to cover all your interests.

It is highly rewarding to buy, own and maintain your own home. Whether this is your first home or you have experience with the home buying process, we can help. With the right tools at your fingertips, you can be confident in your ability to search, finance your home, negotiate terms and be prepared at closing. Concurrently, purchasing a new home can be overwhelming. Without the right resources and information, the buying process can be stressful and frustrating. With our services, you can avoid the pitfalls. We’ll be here to help every step of the way.

What are the Options for Financing – the most important part of financing is a knowledge of the options available. Consider the following questions as a basis for determining your financing needs.

There are multiple options for consideration as listed below. The key is what is your best fit?

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Adjustable Rate Mortgage

A mortgage that allows the lender to adjust the mortgage’s interest rate periodically on the basis of changes in a specified index. Interest rates may move up or down as market conditions change. The change in interest rate will result in a change in the periodic payments due under the mortgage. ARMs are attractive when short-term interest rates are trending lower.

Balloon Mortgage

Usually a short-term fixed-rate loan that involves small payments for a certain period of time with the balance due in a single, large payment at a time specified in the contract. When the balloon mortgage comes due, the entire balance must be paid. Generally, the homeowner must either refinance or sell the property.

Buy-Down

The payment of extra money on a loan now so as to provide a lower interest rate over either a given period or over the life of the loan. To buy down a mortgage, the buyer pays additional points to the lender, which will decrease the interest rate for a specific period.

Conforming Loan

Conventional home mortgages, first mortgages up to loan amounts mandated by Congressional directive, which meets the qualifications for sale or delivery to either the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC).

Construction Loan

A structured, short-term loan to provide funds necessary to begin construction on buildings or homes.

Conventional Mortgage

A mortgage loan made by an institutional lender without the inclusion of government guarantees such as VA or FHA loans.

Convertible ARM

The convertible ARM is a combination of both fixed-rate and adjustable rate mortgages, allowing the best of both options in one package.

Deferred Interest Mortgage

A mortgage in which the payment is not sufficient to cover the principal and the interest and the payment portion of the interest is postponed until a certain date at which time the interest postponed is added to the principal owing.

Federal Home Loan Mortgage Corporation (FHLMC)

The Federal National Mortgage Association, which is a congressionally chartered, shareholder-owned company that is the largest national supplier of home mortgage funds. It is commonly known as Freddie Mac. The company buys mortgages from lending institutions, pools them with other loans, and sells shares to investors. Detailed information may be found at http://www.freddiemac.com.

Federal Housing Administration (FHA)

An agency of the federal government, the Division of the Department of Housing and Urban Development, both sets standards for the underwriting of private mortgages and insures residential mortgages made by private lenders.

Federal Housing Administration (FHA) Loans

Low-rate loans available to Americans with smaller incomes who are interested in modestly priced homes. Down payment requirements are usually lower than the prevailing ones.

Federal National Mortgage Association (FNMA)

The largest supplier of mortgages to home buyers and owners, a corporation established by Congress and owned by stockholders. Commonly referred to as ‘Fannie Mae,’ this federally chartered agency buys mortgages from lending institutions, pools them with other loans, and sells shares to investors. Detailed information may be found at http://www.fanniemae.com

Fixed-Rate Mortgage

The interest rate you pay and the monthly principal and interest payments are agreed upon from the outset and will not change throughout the entire term of the mortgage.

Government National Mortgage Association (GNMA)

A government-owned corporation within the U.S. Department of Housing and Urban Development, it is also referred to as ‘Ginnie Mae’. This government agency guarantees the payment of principal and interest on all of its pass-through securities, and its guarantee is backed in turn by the full faith and credit of the U.S. Government.

Graduated Payment Mortgage (GPM)

A mortgage that usually starts the borrower with low payments that are gradually increased over five to ten years, before leveling off for the remainder of the term of the loan until the loan is fully amortized. Negative amortization usually occurs until the payment reaches the level payment stage. Usually government insured loans (VA or FHA).

Growing Equity Mortgage (GEM)

This is a long-term mortgage whereby the borrower agrees to increase his payment each year by an agreed amount. The added money per payment is applied directly to the outstanding principal on the mortgage. The mortgage thereby is paid off in a shorter number of years.

Renegotiable Rate Mortgage (RRM)

Similar to an Adjustable Rate Mortgage, this type of mortgage allows the interest rates and payments to be adjusted periodically according to an index.

Reverse Annuity Mortgage (RAM)

A type of mortgage in which the property’s equity serves as security for periodic payments made by the lender to the borrower. Mortgage is generally paid out upon the sale of the property.

Rollover Mortgage (ROM)

A mortgage where the payments are only guaranteed for three, four, or five years. The borrower is allowed to refinance at the end of the term at the interest rate then applicable.

Shared Appreciation Mortgage (SAM)

It is a loan arrangement where two or more parties participate in the purchase of real estate and share the appreciation and tax deduction. Similar to shared equity mortgages.

Veterans’ Administration Loans

Mortgage loans to veterans by banks, savings and loans, or other lenders that are guaranteed by the Veterans’ Administration, enabling veterans to buy a residence with little or no money down.

Wraparound Mortgage

A secondary financing option in which a new larger mortgage is created to encompass the first mortgage. This large second mortgage is used to preserve the low interest rate on the first mortgage for a potential buyer.

Become Familiar with the Community you are Considering

Evaluate as you drive though a community. Consider the following questions as a basis for determining your location needs:

FINDING THE RIGHT HOME

Keep your eyes open and your notebook in hand as you walk through a potential home. Consider the following questions as a basis for determining your needs as a homeowner:

Think carefully about each house you see and don’t be in a hurry. Your real estate agent can point out the pros and cons of each home from a professional standpoint.

MAKING THE OFFER

Making an offer to buy a home entails many factors. You and your Sales Associate will discuss the following factors prior to putting the offer on the table:

There could be multiple offers on the property, especially during a sellers’ market. The offers could range from all cash to prices in excess of what the home is listed. It is suggested not to be so eager to offer more than what you think the house is worth or terms that do not and will not fit your short and long term economic plans.

If the seller wants to pursue you offer, the seller will either accept the offer as presented, or make a counter offer and ask you to resubmit a proposal. When all the parties involved have agreed upon the details, initialed any revisions and signed the final agreement then an offer becomes a contract.

CONTRACT REVIEW

Sales contracts may differ significantly yet all should clearly set forth the responsibilities and privileges of all the parties involved. It is a legally binding document that protects each party. Carefully review the terms of the contract. The sales contract should include the following:

PROCESSING THE SALE

Once the contract is signed, your Sales Associate will continue to be your advocate and ensure that your best interests are served. Some of the details they will be available to handle are:

Prepare for and attend the closing.