Posted on September 15, 2017 | 4:51 p.m.
Fill your head with facts about loans, points, fees and insurance
The Pagliaro family has worked with Coastal Housing Partnership to purchase their home. (Courtesy photo)
For 30 years, Coastal Housing Partnership has been working to keep home ownership within the reach of local workers.
Since 1987, the Santa Barbara-based nonprofit has helped more than 10,000 employees become homeowners through home-buying education and savings on home-buying costs.
The tradition continues for its 30th anniversary year with 30 tips to help get you started on your own path to home ownership.
“Our work as a partner with local employers helps companies and nonprofits successfully attract and retain employees in a region known for its high cost of housing,” said Corby Gage, Coastal Housing Partnership executive director.
“Our goal is to provide local employees with the information, tools and resources to achieve their dream of homeownership,” Gage said.
The following 10 tips for potential home buyers are the second set Coastal Housing has released as it celebrates its 30th anniversary — the first is also available on Noozhawk.
Looking for more advice? Stop by the Home Buying Fair, 5-8 p.m., Sept. 19 at the Deckers Rotunda, 6601 Hollister Ave., Goleta. RSVP at homebuyingfair2017.eventbrite.com/?aff=noozhawk or find out more at homebuyingfairs.org!
» Know different types of loans
Understand the advantages and disadvantages of loan types — what works for you, your financial situation and your risk tolerance. Ask your lender about the variety of loan options available to select the loan that is right for you.
» Understand how a loan is priced
The interest rate is not the only cost of a mortgage loan. There are also points and fees; these costs are paid upfront as part of the closing costs. Ask your lender how much they charge in fees.
Does your loan pricing include point(s)? A point is 1 percent of the loan amount. Since points are prepaid interest, if you pay point(s), you pay should pay a lower interest rate on your loan.
» Mortgage insurance; is this the right strategy for you?
Typically, if you do not have a 20 percent down payment, a lender will require you to pay for mortgage insurance. This adds to your monthly housing expense.
Talk to your lender about your options to determine if it makes sense for you to secure a loan with mortgage insurance, get a piggyback loan or wait until you have saved a larger down payment.
» Don’t make any new purchases or open new credit cards
Opening new lines of credit while in the home-buying process will affect your credit score. It may also impact your debt level, which will affect how much loan you can qualify for.
» Coastal Housing Partnership member?
Check to see if your employer is a member of Coastal Housing Partnership.
If so, you have the ability to significantly reduce your closing costs. Coastal Housing Partnership, a nonprofit organization, works with a network of service partners (real estate agents, lenders, home inspection firms, residential developers) who offer savings on the cost of their services for employees of member companies.
In addition, Coastal Housing Partnership offers home-buying education at no charge to employees of its member companies.
» Work with a real estate agent
With so much access to property listings on the internet, it is tempting to think a buyer doesn’t need an agent. Not so. In a competitive market with multiple offers, having the expertise and advice of a real estate agent can be highly beneficial.
The agent should be familiar with the market you are interested in, help you find a house that meets your needs, recommend how much to offer on the home, negotiate the price and terms of the transaction, and stay involved throughout the term of your escrow — helping you release contingencies and deal with any challenges that arise during the escrow period.
» Needs and wish list
Make a list of what you want in a home — needs, wants and dreams. You may have to compromise on some of the wishes, but not on the needs.
» Home comparison worksheet
Make a home comparison grid to help evaluate potential homes. Balance your wish list with budget constraints. Take a photo of the homes you like and label them with the address, so the homes don’t all blur together.
» Know the market
Take the time to research the market, so you feel confident you are making a wise decision on your home purchase.
» Explore the neighborhood at all different times
Check out the street and the neighborhood at different times during the day and on weekdays, as well as the weekends.
What seems like a quiet neighborhood during the day may be quite different at night. Or there may be plenty of parking on your street on the weekend, but the weekdays might be a different story.
Angel Pacheco is a publicist for Coastal Housing Partnership.