With 17 years of real estate experience, I come across many first time home buyers from all walks of life, but one common theme I have found is that they are fearful of purchasing their first home, they’re assuming they can’t afford it. Well, I am here to shout from the rooftops that not only can most first time home buyers afford to own a home, but that the time is now!
Did you know that with a credit score of only 640 + and 3.5% money down you can buy your first home or condo? I am here to tell you that with requirements like this, there is no reason to waste time, and here is what the next steps should be, should you fall into this category and thinking of owning your first home.
The very first thing to do is get prequalified by a lender. Realtors already have relationships with lenders so no need to hunt one down. The lender will run your credit, ask you a couple of key questions regarding your debt and income and let you know what you can afford. This will give you a good idea of what price range you will want to focus on when starting your home search with your realtor.
Good news is that in some cases (because interest rates are so low) the rent you are paying will be equal to a mortgage payment. Here is an example of what a mortgage payment would be in an average scenario that I see often among first time home buyers: today’s interest rate for a 30-year fixed payment is 3.25. So let’s say you want to buy your first home and your lender says you can afford a home up to $400,000, (yes you can find a home for $400,000 in Woodland Hills, they’re out there!). Your payment at a 3.25 interest rate minus the 3.5% you put down on a house at $400,000, which would make your mortgage payment $1679.90. Now that sounds realistic, awesome and affordable right?
But wait, we’re not done yet … bummer huh! We do need to add property tax, homeowners insurance and mortgage insurance. Mortgage insurance is a cost that a homeowner has to pay if they are putting less than 20% down on a property. Mortgage insurance for $400,000 is $402 per month. Although this may seem a little hefty to tack onto the mortgage payment, this cost will be dropped once your home has 80% LTV (loan to value) of equity. Property tax is 1.25% of the sales price of the home, so on a home priced at $400,000, that would make your property tax $416.00 per month and homeowners insurance is roughly $80 a month. This makes a grand total payment for a home at $400,000 to be $2,578.00 roughly. Now, that sounds pretty reasonable, especially when you consider you’re only putting down 3.5% and you’re a homeowner in the wonderful neighborhood of Woodland Hills (in this example anyway)!
Now if you want to buy a condo, you can find one at a lower cost but you will need to include Home Owners Association (HOA). The cost for HOA varies, but it runs anywhere from $150-$400 per month. What this cost includes varies too and is something you will have to ask your realtor. In some cases it will include earthquake insurance, homeowners insurance, sometimes cable, water, and maintenance such as the landscape of the building.
Now that you have a basis for the home purchase process, thought I would highlight a few elements of Woodland Hills that has kept me here for nearly 20 years and something you should consider when purchasing a home in this area. Because we all know real estate is all about LOCATION! LOCATION! LOCATION!
If you have or are planning a family, Woodland Hills has an array of great
elementary schools, two in particular: Serrania and Woodland Hills Elementary –
both have very high academic ratings along with a lot of parent
participation. Families who have young children move to Woodland Hills for
these schools specifically. Another great aspect of this area is the small town
feel. Halloween is one of my favorites and WOW…..it’s great! Just south of Ventura Blvd., starting on Dumetz St., you will see hundreds of kids
and parents roaming the streets at dusk and it’s like you’ve gone back in time
to the 1950’s. I’ve lived in Woodland Hills over 18 years and when my kids were
young, they attended Woodland Hills Elementary and every Halloween many of my friends would bring their kids over to my house to go trick-or-treating in my
neighborhood because it was truly one of the best!
I hope this article provides some insight into purchasing a home in Woodland Hills (or surrounding areas like Calabasas, West Hills or anywhere in the Valley etc.).
And for all you Woodland Hills locals, hope you’re staying cool in this heat wave we’re having and please look or my next article “How to get your
home ready to sell.”
—Sheryl Thornton works with Rodeo Realty and has nearly 20 years of experience in the real estate industry. If you are interested in talking about purchasing or selling a home or just have questions, contact her online at www.SurfHotProperties.com, email her at SheryLLynnThornton@gmail.com or call her at 818.903.4749.