Years of experience in real estate sales can make a difference, but someone new to the field can also be more enthusiastic and work harder for the buyer. But it still comes down to the fact that you find an agent that you feel comfortable with, but is aggressive enough to get results.

Assessing Your Needs
In determining what kind of house to buy, you need to do your homework thoroughly to find the best possible place for you and your family. You may want to talk to your Realtor about the location and neighborhood, how big the property should be, what style it is, what is close to schools and shopping, etc. You should make a list concerning the number of bedrooms, bathrooms, size of kitchen, and amenities such as a swimming pool and/or a large patio for entertaining that you want before you actually go out to look at houses.

Computing Your Affordability/Debt
How much house can you afford?

• You must compute your income: What is your estimated gross (pre-tax) income per month? (Include Salary, Commissions, Bonuses, and Child Support.)
• Then, calculate your monthly debt: What is the minimum you are required by your creditors to pay each month for credit cards and loans?
• Cash Available: How much cash do you have for a down payment and other fees? (Include cash from checking and savings accounts, proceeds from current home and gift money.)

Securing Mortgage Pre-approval
You will need a pre-approved loan certificate to buy a home. A pre-approved loan provides wonderful negotiating power in buying a home.

The key is pre-approval, not just pre-qualifying which anyone can obtain easily over the telephone in five minutes. Most Realtors want prospective buyers to have a pre-approved loan before they will show them what properties are on the market.

It creates a healthier situation if you have gone through the actions of getting pre-approval to show you have the credit and the money. It makes the deal easier to move ahead. A pre-approval is just as good as cash to the seller.

Your first step in buying a home is to visit a reputable lender’s office to apply for a mortgage and get pre-approval for financing. Second, talk to a loan officer who will give you a good sense of what you can afford in a home.

To qualify for that loan, lenders will need documented proof of everything relating to your finances: two years of employment history, two months of pay stubs from your current place of employment, or verification from the employer; record of expenses; credit history from two credit bureaus; bank account statements; and tax records.

Making an Offer
Once you have found your dream house, you and your Realtor will prepare the necessary contract between you and the sellers of the property. You will be expected to offer some “earnest money” with the offer to be presented to the sellers. The payment ranges from $1,000 to a percentage of the price of the house.

The contract will spell out any contingencies you want, such as interest rate, move-in date and repairs that must be done to the house before the transaction closes. The agent will most likely help you with advice on financing and refer you to a lender.

Choosing a Mortgage
Choosing the right mortgage is like going into an ice cream store. Lenders offer all types of loan flavors to suit every taste and pocketbook — FHA, VA, HUD, and conventional mortgages.

The four features of any mortgage are amortization (the schedule at which principal is repaid), monthly payment, interest rate, and the length of loan. Normally, mortgage payments have a fixed interest rate and term, but alternative mortgages permit the term and interest rate to vary. The most common type is the Adjustable Rate Mortgage that starts low and periodically adjusts up or down depending upon the housing market conditions.

Inspecting Your Home
A professional inspection of the property you are buying is definitely a “must” to insure you against any surprises that may be disastrous for your pocketbook. The inspection will be all-inclusive from the heating/air conditioning system to the plumbing. The cost of a home inspection will probably be between $100 and $500.

By law, the sellers must disclose any defects in the property. In addition, anything that an inspector finds must be repaired by the sellers up to the price in the contract.

Insurance and Taxes
Homeowner’s insurance is required when you move into a home. Choosing a reputable insurance agent and deciding on the necessary coverage is the buyer’s responsibility. Ask yourself what liability do you need to cover accidents and comprehension to cover fires, earthquakes and floods. Does the roof have shingles or tiles? Your Realtor will be able to help you in recommending an insurance company.

Your Realtor will also explain the taxes that you as a homeowner will need to pay: including property tax at the state and local level plus taxes levied sometimes by school districts. Property taxes are collected by the Ventura County treasurer tax collector made by the county assessor and distributed to local agencies. County property taxes may be paid in two installments due Nov. 1 and Feb. 1 and delinquent after Dec. 10 and April 10 respectively. Tax bills are mailed on or before Nov. 1, or if not received, call the tax collector’s public service department at 805/654-3744 and provide an assessor’s identification number or the address or legal description of the property. Because of property taxes are based on the value of property and because there can be differences of opinion between the county assessor and the owner, a procedure exists to appeal the assessment. For more information, call the Clerk of the Assessment Appeals Board 805/654-2181.

There are also certain tax exemptions available to homeowners who qualify for specific programs. One exemption is the Homeowner’s Property Tax Exemption, that allows up to a maximum of $7,000 of assessed value to an eligible owner of a property which he/she occupies as his/her principal place or residence. For more information, contact the Homeowners’ Property Tax Exemption, County of Los Angeles, 500 West Temple Street, Los Angeles, CA 90012-2770. If you are over 65, or qualify as a disabled veteran, you may qualify for some other tax exemptions.

Real Estate Terms
Some simple information about the relationship between rates, points and time will make it easier to speak with your lender:

• Points: Costs assessed at closing by the lender which equal 1 percent of the loan and lowers the interest rate you pay which means lower monthly payments. In time, lower monthly payments pay for the cost of the points, but if you sell the house within a couple of years, you lose that savings so you would be better off paying the higher interest rate.
• Adjustable Rate Mortgage (ARM) or a balloon (2-step) mortgage: An ARM program initially offers a lower interest rate than fixed rate loans, but once this specific time expires, the interest rate will be adjusted, based on a selected economic index like the one year T-bill. This process repeats itself throughout the life of the loan.
• Balloon Loans: This reduced interest rate program allows you to make fixed payment loans for a period of 5-7 years before the balloon payment becomes due. The loan is amortized similar to the 30-year fixed rate program, and at the end of the term, the balance is either paid in full or the buyer must refinance.