Purchasing a home is one the biggest, most important investments one can make. Continue to read to find reliable and sound advice to follow when buying a home in Palm Springs, CA, including if buying in this area is the right choice for you and your family.
Step 1: Understand What is Affordable to You
The first and most important step in buying a home is to fully understand your finances. It isn't as fun as looking at homes, we know, but it is still just as important and necessary to determine how much you can afford in Palm Springs, CA. Make sure you have a firm handle on your finances, gathering any supportive documentation, and knowing all the answers to the following questions will get you that dream home you've had your eye on.
- What is your gross income?
- What do you plan to spend on your mortgage each month?
- Do you have any credit card debt?
- How much do you have in savings, and what do you wish to spend?
Step 2: Down Payment
Buyers tend to put down 5 to 20% of the purchase price, and buyers putting down less than 20% are required to pay PMI, or Private Mortgage Insurance, monthly until that 20% is reached. Most buyers use personal savings to finance down payments, though there are other options, including gifts and loans from relatives. We suggest taking time to understand PMI to make the cost smaller in comparison to the value of being able to secure a fixed mortgage.
Step 3: Find your Team
There are many involved in the home-buying process you undertake. When you set out to find the right home in Palm Springs for you and your family, make sure that you surround yourself with experienced, trusted professionals who can help make informed decisions to avoid disappointing pitfalls. There are typically three people who will make up your wonder team:
- Housing Counselor: A professional who can help you prepare homeownership to ensure you are financially ready. A homeowner counselor isn't necessarily required, though it is recommended for first-time homebuyers.
- Real Estate Agent: This professional will help you navigate all the intricate steps of the home-buying process while being available to answer your questions. Their ultimate job is to help find a home for you and your family that fits you well, meeting all your needs, and budget requirements while being the top negotiators.
- Lender: This professional is responsible for helping you secure the best financing option for your financial situation. This lender will educate you on mortgage options, rates, points, and terms that can be better explained if you are unfamiliar with them.
Step 4: Find the Right Home
Finding the right home for yourself that fits your finances, lifestyle, and stage of life will require planning. Ask yourself questions about whether the location in Palm Springs, CA will fit your family. Sharing information about your lifestyle and expectations to better assist you. Ask yourself if suburban living in Palm Springs or urban living is better suited for you. Do you want a large home with a yard? Or is condominium living the right fit for you? Once you do decide what home type you want, you should establish your must-haves and your deal breakers.
Step 5: Apply for a Home Loan
Taking out a mortgage on a new home can be a complex part of the home-buying process. There are steps to follow that can help make the process all the easier for you when it comes to taking out your first mortgage.
The Mortgage Application. The lender you choose to work with to complete the loan application will have you provide the most recent:
- Bank Statements
- Statements for outstanding debt
- Tax returns
- Proof of supplemental income
Approval Process. The lender will submit all your information for approval, using the following to assess your eligibility:
- Your c4's
- Housing expense ratio
- Debt-to-income ratio
The Costs. Within a week of completing your application, your lender will send you a loan estimate that may include:
- Terms of your loan
- Your APR
- Your finance charge and payment schedule
Final Step. If you are approved, your lender will schedule a home appraisal to determine the market value of your chosen dream home.
Interested in purchasing your first dream home in Palm Springs, CA? Follow these steps we have carefully laid out for you and you won't go wrong when financing a home for you and your family.