Lending today is so much more different than when I first started 12 years ago.  Back then you had to have good credit, a steady job, and 20% down to purchase a property.

Today my clients are getting loans with marginal credit, minimal to no down payment,  self-employed with less than 2 years work history, etc.

Purchasing a Home?

The market in California has gone through an amazing run in property values, the rest of the country has caught on to what we already know, this is the place to own a home!

The run in the housing market has partly been spun by historical low interest rates.  But, leaving that aside, people are tired of the bad weather across the country and realize that owning anything here is a good investment.

The Home Buying Process...

Please follow my recommendations for this series of events:

1. Become pre-approved with a lender to determine what you qualify for.  Rather than looking at a $1 million dollar property when you only qualify for $700,000 is wasting everyones time.  Your lender will recommend the appropriate down payment and loan program so as to keep your payment affordable.  I don't believe in having people chase their housing payments.  How can you enjoy your home when you have over stretched yourself and you are awake at night worrying about that payment!
2. Once you know what you qualify for, search for a full time realtor.  I stress full time because many people do this for a hobby and really don't know the market very well or how to negotiate for your best interest. (I have a recommended list of realtors who are experts in the field)
3. The search is on.  Based on what you qualify for, you can afford either a house or a condo in your desired area.  From what I am hearing there is more inventory on the market (we are August 04) than there has been in years.  Once you have gone through the offer/counter offer phase, the fun begins.
4. What did I do?  When can I back out? How can I get my deposit back?  These are generally first time home buyer syndromes, take it easy, you are in good hands! Let your realtor and lender guide you through, we have been through this many times!!!
5. Now that there is acceptance, you are in escrow.  Many states don't have escrow, they rely on attorneys to enforce the provisions of the contract.  Escrow is a neutral third party appointed to act as a custodian for documents and funds during the transfer of property from seller to buyer. What this basically means is that escrow acts to allow this swap to happen without one side giving the key or monies to other party until all the conditions for the sale have been met. 
6. Inspections, inspections, inspections.  Yes you need to know the condition of the property you are buying.  And yes you have to pay for that report.  By now the appraisal is in, and yes you have to pay for that report as well.
7. If all goes well and there are no hiccups, you should have a smooth closing and.......the keys to your new house!

Refinancing a Home?

The boom in the refinance market has been unparalled in lending history.  With rates at 40 year lows, do you know anyone that didn't take advantage of the low rates to refinance their property?  (I know a few people, and let me tell you they are not the brightest bunch.)

However, this has created an environment where anyone is claiming to be a lender.  The horror stories I hear of lenders ripping off their clients is a shame of what our industry has become!  Yes there are a lot of young kids driving $100,000 cars, we'll see how long that will last......

Here are a few good reasons to refinance your home:

1. Lower your monthly payment
2. Pay off high interest rate debt
3. Get cash for remodeling or college education

I do not recommend that you refinance and pull money out for:

1. To get a car that you cannot afford
2. To buy nice jewelry

Do you get the picture why?

The Refinance Process....

Essentially with a refinance you still have to through all the paperwork similar to a purchase loan.

1. You will have to be qualified for your new loan
2. Your lender will guide you through programs and rates
3. You still will need an appraisal, especially if you want to cash out monies
4. Escrow will need to be opened, and yes you will sign a lot of paperwork