Pixel Tracker

Friday, March 22 , 2019, 9:52 am | Fair 55º

 
 
 
 

David Kim: Tips for First-Time Home Buyers

When the time comes to take the leap from renter to homebuyer, one of the most important steps is establishing a budget. Here are four steps to help prepare your finances for buying a home:

1) You must have your credit in order.

2) Save adequately for a down payment.

3) Prepare for upfront costs (i.e. inspections and closing costs.

4) Save for unexpected maintenance.

It is crucial for a homebuyer to have the best credit score possible before applying for a mortgage. The better your credit score, the lower interest rate you will pay on your mortgage. Having a lower interest rate will put more money in your pocket instead of to the bank.

When it comes to a down payment on a house, a good amount to save up for is 20 percent of the purchase price.

Buyers can put less down on a home but lenders will see this as risky. When you put down any less than 20 percent, your lender will likely require private mortgage insurance (PMI), which adds another cost to your monthly payments.

Some upfront costs to keep in mind during a transaction include home inspections (few hundred dollars and up), closing costs (approximately 1-2 percent of purchase price) and some extra cash.

Lenders have been known to require cash (reserves) in your bank after the purchase is complete (2-6 months) worth of mortgage payments.

When owning a home, you do not have a landlord to call when things break. It is up to you to pay for and fix the problems that will eventually happen. That is why you should have a safety fund for when issues arise.

There are many resources out there for first-time homebuyers to consider. Do your research and contact a professional REALTOR® to help assist you on your journey to homeownership.

— David Kim is a licensed real estate broker with Village Properties and the 2017 president of the Santa Barbara Association of Realtors. Contact him at [email protected] or 805.296.0662. The opinions expressed are his own.

Support Noozhawk Today!

Our professional journalists work tirelessly to report on local news so you can be more informed and engaged in your community. This quality, local reporting is free for you to read and share, but it's not free to produce.

You count on us to deliver timely, relevant local news, 24/7. Can we count on you to invest in our newsroom and help secure its future?

We provide special member benefits to show how much we appreciate your support.

Email
I would like give...
Great! You're joining as a Red-Tailed Hawk!
  • Ask
  • Vote
  • Investigate
  • Answer

Noozhawk Asks: What’s Your Question?

Welcome to Noozhawk Asks, a new feature in which you ask the questions, you help decide what Noozhawk investigates, and you work with us to find the answers.

Here’s how it works: You share your questions with us in the nearby box. In some cases, we may work with you to find the answers. In others, we may ask you to vote on your top choices to help us narrow the scope. And we’ll be regularly asking you for your feedback on a specific issue or topic.

We also expect to work together with the reader who asked the winning questions to find the answer together. Noozhawk’s objective is to come at questions from a place of curiosity and openness, and we believe a transparent collaboration is the key to achieve it.

The results of our investigation will be published here in this Noozhawk Asks section. Once or twice a month, we plan to do a review of what was asked and answered.

Thanks for asking!

Click Here to Get Started >

Reader Comments

Noozhawk is no longer accepting reader comments on our articles. Click here for the announcement. Readers are instead invited to submit letters to the editor by emailing them to [email protected]. Please provide your full name and community, as well as contact information for verification purposes only.

Daily Noozhawk

Subscribe to Noozhawk's A.M. Report, our free e-Bulletin sent out every day at 4:15 a.m. with Noozhawk's top stories, hand-picked by the editors.

Sign Up Now >

Meet Your Realtor Sponsored by Village Properties

Photo of Gary Welterlen and Carla Reeves
Gary Welterlen and Carla Reeves
"We both love this business. We strive to make life long relationships from each real estate transaction."

Full Profile >