It's a Great Time to be a First Time Home Buyer in Hemet, California
by John Occhi, Hemet CA REALTOR®
Hemet CA Real Estate
There is no doubt about it, the local Hemet real estate market has kept up with the housing market throughout the Inland Empire, Riverside County, Southern California and the rest of the country overall, showing a steady decline in both the number of homes being sold each month as well as the value of homes being sold.
On the surface, this may sound like bad news...and to some it is.
Don't let it ruin your day though if you want to buy a new Hemet home for you and your family...or even as an investment. You see, it is a great buyers market today. Today, the real estate buyer rules the local economy, and as a ruler, you should be rewarded.
First off, if you are a first time buyer and can document your earnings and that you are an overall good person with a history of paying rent on time, there is a great loan for you through the State of California called the CalHFA.
The CalHFA is not credit score (FICO) driven, so don't even worry about that. You do have to worry if you make too much money though, as there are caps based on the size of your family. The income level for a family of 3 runs approximately from $40,000 to $80,000 a year. (Different counties in the State of California have different levels of income and home value.)
To qualify for this loan, let me know and I can put you in touch with a couple of really great loan officers that I believe are the most ethical in the industry. Each loan officer I refer to is a Christian brother and both have a very low to non-existent default rate on the loans they have written over the past several years.
So, this CalHFA is full amortized over 30 years at a fixed interest rate - the rate is fairly low and the buy rate (or points you have to pay for the loan) is extremely low at only half a point.
This is the best part - the loan is due in 35 years. That's right, a 30 year loan due in 35. The way they do it is only charge you interest for the first 5 years! This has got to be one of the most solid and conservative loan products ever offered to a first-time buyer in the state of California.
The news gets even better for the first time home buyer looking to buy their first home in Hemet or San Jacinto because of the values of our homes in Hemet. The medium price for all of the homes sold in Hemet in July of this year is down to just $290,000 from the $296,000 medium price home in Hemet for July 2006 - making them extremely affordable.
Not only does the CalHFA program have caps on the income of the family purchasing their first home in Hemet, they also have a cap on the amount financed - which as I said is a good thing for us here in the Inland Empire. The current cap for a CalHFA loan is $417,000. Other parts of Southern California are not as fortunate, with their homes averaging around a half million dollars - so they cannot take advantage of these great programs as easily.
Now here is where the kicker comes in...
This is not a 100% financing program...it is 97%. So for a $290,000 medium priced home in Hemet, the first time h9omebuyer has to contribute approximately $8,700 towards the purchase price as well as pay their closing costs, which would be approximately another $11,600, or 4% of the purchase price.
So Let Me Show You How It's Done, Today...
Lets assume you are a first time buyer, wanting to buy your perfect dream home in Hemet CA and you meet all of the criteria for the CalHFA loan, except you don't have the $20,300 to cover the out of pocket costs of buying your first home, in Hemet.
Let's assume you find the perfect home, and you notice that the price has been dropped significantly over the several months that it has been on the market - so you know the seller wants to sell, right?
Now instead of beating the Hemet home seller up on their price, after all they are already showing their lumps and bruises, show some compassion and offer 8% above what they are asking, and ask them to contribute back the 7% you need to close the loan.
(The reason I suggest raising the price 8% if because all of their other closing costs will also go up, as most are based on a percentage of the sale price - not the sellers net.)
So, let's take you medium priced Hemet home for sale at $290,000 and you offer $313,200 with a 7% ($21,924) contribution towards the purchase price and closing costs.
The good news is you can still do this with the CalHFA. Many loans require you to have your deposit and costs for 6 months, or prove where the money is coming form such as the sale of your personal asset - it is a term they call seasoning. There are some other loans that will allow a gift, but it is not as common as we would like to see.
So there you have it, as a First Time Hemet Homebuyer, there is just one example of an excellent loan product that is available today and a strategy on how to best utilize the program - legally and ethically. You get a great deal on a great home...you have a great secure and conservative loan that can not come back and bite you down the road and perhaps most importantly is you are being patriotic by helping the economy in what may well be one of it's darkest hours in your lifetime.
Now Have a Blessed Day,
by John Occhi, Hemet REALTOR®
First Time Home Buyer Mentor
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