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How To Buy A House In California First-Time Buyer

California is a sought-after state to live in, boasting picturesque counties and cities and an exceptional quality of life. As a prominent real estate agency in CA, we possess in-depth knowledge of the intricacies of buying a home here. Hence, we’ve crafted this guide for first-time buyers, and included what is considered a first-time buyer in California, so you can buy even if your income level isn’t the highest.

Keep reading to learn how you could put down roots in California.

Renée White

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August 16, 2023
Table of content

    How To Buy A House In California As A First-Time Buyer: A Step-By-Step Guide

    There are many steps to how to buy a house in California if you’re a first-time buyer. It takes meticulous planning, careful househunting, a skilled offer and negotiations and carrying out numerous formalities before closing. We have the experience and specialist negotiating skills to help you get the most out of every stage of this process. Keep reading this section for details and get in touch if you want to learn more.

    Couple holding house keys for how to buy a house in California first-time buyer


    There are several important steps to take in the planning stage. Begin by conducting an honest assessment of your financial situation, including your income, savings, and monthly expenses. Next, evaluate this in conjunction with your credit score to determine your budget for purchasing a home.

    If you want to increase your budget, you should start reducing your expenses, looking for ways to boost your income and save for a bigger down payment. From here, you are ready to:

    • Look at home loan options
    • Research neighborhoods in California where you might like to live
    • Look for the right real estate agent

    If you want to move to Contra Costa County, you won’t find a better option than us for your real estate agent. We can offer expert local knowledge, exceptional negotiating skills and an extensive team of real estate professionals to get you a favorable outcome.

    House Hunting:

    We strongly advise against house hunting without first securing a real estate agent. Operating in Contra Costa County and its surrounding areas, we invite you to turn to us for your move here. With our expertise in local markets and neighborhoods, we can assist you in identifying areas that align with your criteria and locating housing options within your budget.

    Here are some tips for finding your target house as a first-time buyer in California:

    • Stay within your budget
    • Prioritize your must-have features, but know what you can compromise on
    • Research the online listings carefully
    • Attend open houses to get a real sense of properties and neighborhoods
    • Visit properties at different times of day
    • Always keep resale value in mind
    • Inspect properties as thoroughly as you can
    • Be patient and don’t make decisions based on emotions alone

    Thorough preparation is essential in California. If you’re a first-time buyer, we’re here to assist. We’ll have a meeting with you to discuss your future aspirations and financial situation, and then we can provide the necessary support in identifying appropriate neighborhoods and properties for your consideration.

    Making An Offer:

    For how to buy a house in California as a first-time buyer, we cannot overstate the importance of having a real estate agent to assist when making an offer. With our expertise and experience, we know the appropriate starting offer to capture the seller’s interest. Additionally, we bring expert negotiating skills to the table, employing different approaches in various scenarios to achieve the best possible outcome.

    Other tips for making an offer include:

    • Look at comparable property sales in the area to determine a reasonable price
    • Consider whether it is a seller’s or a buyer’s market
    • Stay within your budget
    • Pay attention to disclosures about the property
    • Be ready to compete with other prospective buyers
    • Attach a pre-approval letter from your lender to show that you’re serious
    • Always respond quickly to any contact from the seller
    • Stay emotionally detached and trust your agent


    Home Inspection And Appraisal:

    The home inspection is an important part of the process of buying a home. You must hire a licensed home inspector to make an assessment of the property’s condition. They will look at things like:

    • Structural integrity
    • Electrical system
    • The roof
    • The foundations
    • Plumbing

    This is important because it could uncover potential issues with the property. It may provide some negotiation leverage if anything is discovered and it allows you to fully understand the property’s condition before committing to the purchase.

    The appraisal is usually required by lenders before they approve a home loan. The licensed appraiser makes a formal assessment of the property’s value based on factors like:

    • Size
    • Location
    • Condition
    • Comparable sales

    This protects you from overpaying, ensuring the price agreed is in line with the market value. It is usually required by lenders so that they can determine an accurate LTV ratio for the mortgage.

    We have a network of professionals that we can connect you with for every aspect of purchasing a home. Our trusted home inspectors and appraisal professionals will handle this stage of the process for you at a good price with our involvement.

    Closing Process:

    The closing stage of the process primarily involves work done by your attorneys. There are several important legal processes that must be addressed before the property transaction can be closed. These include:

    • Finalizing loan documents
    • Conducting the title search and purchasing title insurance
    • The home inspection and appraisal
    • Looking over the closing disclosure
    • Signing and recording documents
    • Making the down payment
    • Release of mortgage funds from escrow
    • Transfer of ownership and keys


    Defining A First-Time Home Buyer In California

    There are various criteria for qualifying as a first-time buyer in California. First and foremost, you must not have owned a principal residence within the last three years. Beyond that, to qualify for first-time buyer assistance programs, you will need to meet specific requirements for income levels, credit history, and more.

    A man being shown into a property for how to buy a house in California first-time buyer

    Qualifying As A First-Time Home Buyer In California

    Learn how to qualify for first-time home buyer programs in California. In order to assess your eligibility for first-time home buyer assistance, the organizations running the programs will first assess your income, credit history and employment status. Possible assistance may include down payment assistance, mortgage credit certificates, first-time buyer tax credit, CalHFA loan programs and local housing programs.

    Income And Credit Score:

    Some first-time home buyer programs will impose a limit on the level of income you can receive to qualify. There may be both minimum and maximum income levels to be eligible for assistance.

    Credit History:

    The better your credit history, the more likely it is that you will be considered for first-time buyer support. It also improves your chances of being approved for homebuyer loans in general, so do what you can to improve your credit score where possible.

    Stable Employment:

    Whenever you are seeking a home loan, it is helpful to have stable employment. This shows lenders that you have a reliable, long-term source of income. Self-employed individuals and contractors may still be able to get a mortgage, but there could be more challenges to prove the stability of your income than there would be for an employed individual.

    Understanding Home Loans In California

    To understand how to qualify for a home loan in California, you must first understand what home loans entail. Home loans are specific types of finance aimed at helping individuals and families buy homes. To get one, you need to identify the appropriate type of home loan and go through the application process.

    Types Of Home Loans:

    To qualify for a home loan in California, you will need to meet the eligibility requirements. The criteria depends on the type of loan you are applying for, but it helps to have savings for a down payment, a good, reliable income source and a strong credit history. The available home loan types include:

    • Conventional mortgage
    • FHA loans
    • VA loans
    • USDA loans


    Loan Pre-Approval:

    Getting pre-approval for a loan before embarking on your house-hunting journey is strongly recommended. While this doesn’t provide an absolute guarantee of loan approval, it serves as a robust indicator that you meet the qualifications and provides insight into the potential loan amount you could secure.

    This pre-approval not only aids in your house hunting process but also demonstrates to sellers that you are a committed buyer, enhancing the credibility of any offers you put forth.

    Interest Rates:

    It’s important to try to secure a loan with the lowest possible interest rate, as this will reduce the overall cost of the loan over its full term. Interest rates are set based on a number of factors, some of which are beyond your control. But there are things you can do to access the lowest interest rates for a home loan, such as:

    • Have a good credit history
    • Put forward a large down payment to reduce the LTV ratio

    Generally speaking, you won’t be able to access the most desirable interest rates if you aren’t able to do those two things. For first-time buyers, there may be assistance programs to increase the size of your down payment. We can help you explore your options to find the best approach.

    The Financial Aspect: Down Payments, Closing Costs, And Assistance Programs

    In learning how to qualify for a home loan in California, you will come across issues like down payments, closing costs, assistance programs and other fees. It’s important to have a robust understanding of all these things to plan for your loan application.

    Down Payments:

    This refers to the funds you contribute personally towards the initial expenses of purchasing the home. Essentially, it serves as a demonstration of good faith to the lender and can influence their perception of the risk associated with lending to you. A larger down payment results in a lower Loan-to-Value (LTV) ratio, generally granting access to more favorable interest rates.

    Lenders typically establish a minimum down payment requirement. Depending on the lender and the loan type, this requirement can range from 3% to 20% of the total purchase price. Accumulating funds for a down payment can pose challenges for many first-time buyers, so seeking guidance from a financial advisor is advisable. Alternatively, you might explore available support programs.

    Closing Costs:

    There can be several closing costs to consider in California. They cover various services and processes involved in the transfer of ownership, and it’s important to budget for them carefully:

    • Loan-related fees like the origination fee, discount points and underwriting fee
    • Title search and insurance and escrow fees
    • Recording fees
    • Transfer taxes
    • Notary fees

    The costs that will relate to your circumstances may vary, so be sure to educate yourself on what fees you will incur. As your expert real estate agents, we can help with this.

    Assistance Programs:

    There are various loan programs available from the California Housing Finance Agency (CalHFA) designed for first-time buyers. These programs offer loans with competitive interest rates and down payment assistance tailored to different individuals. While you are still required to repay these loans, they can provide significant support for eligible first-time buyers.

    Other potential options include:

    • CalPLUS Conventional Loan Program
    • Cal-EEM + Grant Program
    • Mortgage Credit Certificate Tax Credit Program (MCC)
    • Homebuyers’ Assistance Program (HAP)
    • California Homebuyers’ Downpayment Assistance Program (CHDAP)
    • Local Housing Authority Programs

    All these options have their own qualifying criteria. You will need to look closely at what’s available to you and evaluate your eligibility if you want to apply for assistance.

    Additional Costs:

    When budgeting for your home loan and purchase, you need to account for other costs that are likely to be incurred. These include:

    • Home inspection
    • Appraisal fees
    • Home insurance
    • Prorated property tax

    We can help you prepare for the full cost of buying a home with our expertise and experience. Work with us, and you will always feel like you have someone you can rely on in your corner.

    Young woman searching property listings for how to buy a house in California first-time buyer

    Buying A House In California With Low Income

    While you may have heard stories about how hard it is to get a home loan in California, success lies in the approach. By targeting suitable areas, aligning your finances, and crafting a strong loan application, affordable homeownership with a low income in California is achievable.


    First-time buyer assistance programs can streamline home loan qualification in California. They offer down payment assistance, aid with closing costs, and provide favorable loan terms for eligible individuals.

    Other helpful resources include:

    • FHA loans
    • Other low-down-payment loans
    • Affordable housing programs
    • Shared ownership
    • Rent-to-own

    Consulting a financial advisor is a smart step. Their expertise can uncover money-saving opportunities and enhance your home loan application’s success. Reach out to us for help in locating a trustworthy financial advisor in California tailored to your needs.

    Budgeting And Saving:

    If you are on a low income, it may still be possible to save for a down payment. You will need to consider the following tips:

    • Create a tight budget and stick to it
    • Prioritize expenses
    • Reduce unnecessary spending
    • Explore opportunities to boost your income
    • Take advantage of assistance programs

    Again, a financial advisor can be a huge help in making this happen. Saving money on a low budget is not always easy to do, but there are ways to make it possible.

    Frequently Asked Questions

    How does the first-time home buyer process work in California?

    To qualify as a first-time buyer, you must not have owned a principal residence in the last three years. Subject to other criteria for income levels and more, you may be eligible for assistance programs to buy a California home.

    What are the different first-time home buyer programs available in California?

    There are many to consider. Popular options include the CalHFA, CalPLUS Conventional Loan Program, HAP, CHDAP and local authority housing programs.

    Can a low-income person buy a house in California?

    Yes, it is possible in some cases. It involves finding the right property, working on your finances and credit history and exploring assistance programs.

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