A guide to buying a home in Los Angeles Curbed LA
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A mortgage preapproval is a lender’s estimate of how much money you can borrow based on your income, credit score and debt. A preapproval includes the type of mortgage you’re approved for, the loan amount and other terms. The best way to fast-track your shopping process is to work with a real estate agent. With your preapproval letter in hand, you can begin meeting with real estate agents.
Step 5: Get Preapproved For A Mortgage
During the underwriting process, your lender will check your credit report and review your asset statements, your appraisal, and your income documentation. This process could require interaction from you depending on your situation. It is important to stay tuned into your loan during this process and provide documentation promptly if requested to ensure your loan moves smoothly. Your real estate agent can help you make an offer when you find the right home and you’re ready to buy.
Searching for the right house
Don’t forget, some processes, such as your appraisal and the home inspection, will happen during that period. And that’s just an average, with some types of mortgages taking longer to close than others. But, if you’re lucky, you might be in line for a grant or easy loan that covers your entire down payment. A few offer to cover closing costs, typically at 2% to 5% of your loan amount. From here, it may only take a few hours to discuss the terms of your offer with your real estate agent before it’s submitted.
Homebuying timeline
Some people may also need a contingency concerning the sale of their existing home. While we can’t predict what your specific home buying timeline will look like, we can break the process into its components, and provide a general idea of how long each might take. Title insurance is designed to protect you and your lender from exactly those kinds of surprises. Better Settlement Services can work hand in hand with Better Mortgage to ensure quick and transparent processing of your title insurance.
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Look into loans that allow some borrowers to buy a house with no money down, like loans guaranteed by the Department of Veterans Affairs (VA) or U.S. You may also be able to qualify for local and state down payment assistance programs. Our partners cannot pay us to guarantee favorable reviews of their products or services.
Next steps to begin your home buying timeline
A higher down payment helps reduce your monthly mortgage payments, which can keep your DTI at a reasonable level. Bear in mind that the down payment is just one of many home-related expenses. You may want to budget up to 1% of the home’s value for annual maintenance costs. Plus insurance, taxes, and homeowners association fees, if there are any, can also add significantly to the monthly cost of owning a home. Mortgage lenders require a down payment as protection against a borrower defaulting. The larger your down payment, the less you have to borrow, the lower your payment may be, and the more likely you are to qualify for favorable terms.
Timeline for buying a home
A higher credit score (and lower DTI) means better loan options with lower interest rates. Home inspections are not required but are recommended because they can uncover costly problems with the house. Home buyers usually have seven to 10 days after the offer is accepted to conduct the inspection.
Agent Tracy Do, also with Compass, says the homebuying process can be as short as a single day and as long as three years. Where your search falls in that time frame will depend on how prepared you are, how picky you plan to be, and whether you get a bit of luck along the way. When that happens, it’s a good bet that the seller received multiple offers from buyers. Being a buyer in that situation can be stressful, since you’ll have to decide how much you’re willing to stretch your budget to beat out other offers. Working with a lender in the early stages of buying will also give you a better sense of what kind of budget you have to work with, and if there are any special loan programs you might be eligible for. Trying to produce a traditional 20 percent down payment can be a significant obstacle in Los Angeles, given the area’s high housing costs.
Time spent looking for the right home also varies by buyer, budget and how they choose to search. Buyers typically searched for 10 weeks and toured a median of five homes, according to a 2023 report from the National Association of Realtors. Consider enlisting the help of a real estate agent to guide you through the process. Getting preapproved with more than one lender helps you to compare loan offers so you can choose the best interest rate and terms. Preapproval involves a hard inquiry on your credit report, but shopping for rates within a 45-day period can minimize the impact to your credit score.
After you apply, your lender will evaluate your credit, assets and income and give you a preapproval letter stating how much you’re approved for. Based on your preapproval letter, your real estate agent can help you find homes within your budget. Bankrate.com is an independent, advertising-supported publisher and comparison service.
In fact, many people do put down less than 20% when buying a home. The median down payment for all US homebuyers in 2023 was 14% of the purchase price, according to The National Association of Realtors. The average down payment varies a great deal depending on the age of the buyer, as well. The median sale price includes starter homes and smaller residences meant for one or two occupants, meaning it may actually understate the priciness of the LA market.
Lenders usually don’t require a home inspection to get a loan, but you should still get an inspection before buying a property. The amount you’ll need for a down payment depends on your loan type and how much you borrow. If a down payment is required, you can buy a home with as little as 3% down (although putting down more has benefits). The first step is determining what are the requirements to buy a house.
There are lots of hiccups that can delay your home purchase — sometimes by quite a bit, too. If everything goes smoothly and you’re able to find a house (and win the bidding war) quickly, it’s possible to buy your home within two months. Sometimes the seller will agree to a price reduction, but he may instead wish to have the work done himself before closing. That’s fine but be sure to check during the walk-through (see below) that everything is now satisfactory.
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