(BPT) - While home sales in California may be showing signs of a slowdown, seven cities in the state remain among the top 20 hottest housing markets in the country, according to Realtor.com.1
However, this slowdown means that after years of a seller’s market, now might be the best time to buy in years, especially if you take the time to do your homework.
“Prospective homebuyers who plan early can minimize the stress and anxiety often associated with finding the right home, lender, financing package and agent,” said Greg Brown, senior vice president, chief lending officer at Golden 1 Credit Union. “When it comes to financing, there are many choices. Choosing the right loan is an important decision and can ultimately make a big difference in your monthly mortgage payment and the interest you pay over the course of the loan.”
If you’re thinking about buying a home, here are some tips to help you get started:
1) Know the “three c’s” of mortgage lending — credit, capacity and collateral. Make sure there are no errors or anomalies in your credit report. Lenders use your credit information to base funding decisions and determine your interest rate. Your capacity to repay the loan takes into account your gross monthly income and current debts. This shows the lender your capacity to repay the proposed loan. Collateral is the house you buy or refinance with the loan. Learn more at Golden 1’s Financial Wellness Portal, which features several educational tools focused on credit and mortgages.
2) Get pre-qualified for a loan. Pre-qualification is the first step in the mortgage process and can be done over the phone or online. It gives you an estimate of what you can afford by completing an official mortgage application and having your credit checked.
3) Figure out how much house you can afford. Most financial experts recommend a total house payment (principal, interest and property taxes) of no more than 32 percent of your gross monthly income. For example, if your monthly income is $6,500, your house payment should not exceed $2,080.
4) Look for cost-saving programs. For example, through the Golden 1 Home Loans Buyer Advantage Program2, up to 25 percent of your Realtor’s commissions could be credited toward closing costs. And this spring, through June 30, 2019, Golden 1 is offering $1,000 off closing costs.3 Other credit unions may offer similar programs.
5) Research mortgage points. You may be able to “buy down” the interest rate on your loan by purchasing points. One point equals one percent of your rate. If you have additional upfront cash, and plan to stay in your home a long time, buying points may save you money.
Sacramento-based Golden 1 is one of the largest credit unions in the country. Anyone who lives or works in California can be a member. Golden 1 has a wide range of options available to homebuyers. Its online mortgage center provides step-by-step information and research to help ease the uncertainty of applying for a home loan. Homebuyers can also visit a branch to meet with a local Home Loan Advisor who knows their community. In addition, Golden 1 has two Home Loans Centers in the Bay Area that offer a one-stop shop for home lending. Home Loan Advisors help members with the entire mortgage, refinance or home-equity loan process in a comfortable atmosphere dedicated to lending. Experienced Home Loan Advisors can also connect homebuyers to Realtors who specialize in the local market.
“It’s imperative that homebuyers have access to the right tools to help them make informed decisions, especially in today’s environment,” said Brown. “At Golden 1, we work hard to ensure that our members have the necessary knowledge to achieve the dream of homeownership.”
*NMLS #669333. Equal Housing Opportunity. Restrictions apply. All loans subject to approval. Not applicable to FHA loans, or any other non-conventional loan programs. Visit https://www.golden1.com/Save1000/default for more information.