First Time Home Buyers: Affordability Checklist

These are common fees associated with purchasing a property that includes a house in San Mateo County, CA.

Property Inspections (home, pest, roof, geological, etc.) – approx $200 -$1000 (1 time)

Loan Application** fee (the appraisal fee will be included) – under $50 (1 time)

**As you will see in the loan application process, the debt to income ratio is an important benchmark for getting a loan.  The link here is to a DTI calculator.  Are you under 36%?

Down payment for loan or cash to purchase (1 time).  You may be asked to provide proof of these funds.

Loan payment includes principal and interest or may include principal, interest, taxes and insurance together (PITI). (monthly)

Closing Costs (escrow, title and lender fees); depends on loan amount and purchase price – approx $1000 – $10,000 (1 time)

Property Taxes – 1% of the purchase price plus adjustments.  Under Proposition 13, the Jarvis amendment, this tends to be roughly 1.3%.  Adjustments can include bonds, assessments, and/or local taxes). (ongoing)

Homeowners Insurance – approx $500-800 annual, paid through a lender’s impound account (see loan payment above) or twice a year to insurer. (ongoing)

One Year Home Warranty – may be built into contract, either buyer or seller paid (1 time or you can renew)

1st year cushion for miscellaneous items (window coverings, household supplies, landscaping work, you name it.)

As a side note:  Be aware of any tax credits for which you may be eligible – Currently, the 2010 Tax Credit for New Home / First-Time Buyer in California is in place.  First time buyers of existing homes must close escrow before Dec. 31, 2010.  Please check with an Accountant to see how any eligible credit may apply to you.

May 2010:  Single Family Homes

San Mateo County median sales price was $750,000 with 3.3 months of inventory (based on 422 sales)

Half Moon Bay median sales price was $685,000 with 12.8 months of inventory (based on 5 sales)

May 2010:  Townhouse/Condos

San Mateo County median sales price was $389,000 with 3.4 months of inventory (based on 134 sales)

Half Moon Bay median sales price was $233,000 with 6 months of inventory (based on 2 sales)