How to secure your first mortgage for your first Los Angeles home
Los Angeles is a massive city of 3.9 million people. There are 3,579,329 housing units in Los Angeles and 47% of those are owned by homeowners. California typically falls behind the national average, partially due to the state’s population that tends to move more. Another factor for the low homeownership rate in California in Los Angeles is the lack of residential construction being carried out to support the large population. Unfortunately, this imbalance of supply and demand creates much higher prices for would-be home buyers.
The good news for Los Angeles citizens is that the average salary in Los Angeles is $77,000, much higher compared to the national average salary of $48,672. Some common occupations in Los Angeles are software engineers, project managers, and operation managers which can pay between $60,000 and $146,000 per year. A few popular employers include Northrop Grumman Corporation, the University of Southern California (USC), the Walt Disney company, in the city of Los Angeles.
Average Home Prices in Los Angeles California
The average home price in Los Angeles is $852,648. The typical Los Angeles home value has actually gone up 10.4% over the past year. Real estate in California will always be high compared to the national average due to amazing weather and a large population which creates high demand. This also creates a great investment opportunity for home buyers. Overtime, Los Angeles property values continue to trend upwards.
First Time Homebuyers in LA
As we have learned, the Los Angeles housing market is not the easiest to overcome for first time buyers. Few Los Angeles residents can afford a median priced home. And to make it even more difficult for first time buyers, they do not have a property they can sell to help cover the costs of a down payment. Some local programs can help first time buyers secure their first Los Angeles mortgage:
LACDA is the Los Angeles County Development Authority. LACDA offers an array of programs and services to assist LA County residents, businesses, and partner organizations. Some of these programs assist new home buyers:
First time homebuyers can receive financial help towards the cost of a down payment as well as closing costs. This program is available to first time homebuyers in incorporated and unincorporated Los Angeles County with one big exception: the city of Los Angeles itself. Frustrating, right? Do not lose heart. There is a lot of areas to explore outside the official city limits.
Qualification for this program requires participants to earn less than $125,280 a year or up to a three person household. Home price purchases are capped $653,883, except in certain areas where at least 70% of citizens are determined to be low-income earners by statewide standards. In these particular areas, home buyers can pay up to $799,190 and the first time homebuyer requirement is lifted.
This program’s participants are assisted by participating lenders to purchase a Los Angeles home loan. As an added bonus, this home loan is accompanied with a grant which can be used for a down payment as well as closing costs.
This is another program which provides monetary assistance for the use of down payments and closing costs. However, because the money comes from federal government grants, there is a limit to the amount of participants in the program.
Homebuyers in this program must earn less than $66,800 per two person household. Loans up to $75,000 can be obtained through the program. These loans do not have interest and they do not need to be repaid until the time the homeowner pays off the mortgage or sells the home.
This is another one that excludes the Los Angeles city limits however some other nearby cities (Hermosa Beach, West Hollywood, and Culver City) are included.
The City of Los Angeles itself has 2 assistance programs for first time buyers. The first is for low income earners making less than $66,800 annually. The second is for earners making up to $130,800.
The lower income assistance program provides a maximum of $90,000 which can be used to cover down payment, closing costs and acquisition. This program’s home purchase limit is up to $745,750 for single family and $513,000 for condos and townhomes.
Like the county program, the loan is deferred and requires no monthly payments. Payment is required upon sale of the property, pay off of the mortgage, or in 30 years.
The CALHFA’s mortgage program for first time buyers is a great opportunity for Los Angeles homebuyers looking to secure their first mortgage. Borrowers in LA county must make less than $144,700 to qualify.
Buyers who obtain conventional loans from qualified lenders can then get smaller loans from the state through Calplus and MyHome programs. These can help with closing costs and even up to 3.5% of the home’s value in down payment assistance.
Once again, these loans do not require monthly payments and only require payment after the home is sold or the mortgage is paid off.
Try Amerifund Home Loans
Amerifund Home Loans is one of the highest rated mortgage companies in the greater Los Angeles area. Our top priority is to educate our clients and make them feel comfortable with the home financing process. You deserve to understand every aspect of the financing process considering it will be one of the largest transactions of your life.
We consistently offer the best prices and consumer direct rates in the Los Angeles area. If you’d like to move forward on obtaining a Los Angeles mortgage, please do not hesitate to give us a call and we will gladly assist you every step of the way.