Old school beach houses settled right on the coast, larger homes with more acreage just on the other side of the road, and a community mixed with long-time locals and summer beachgoers all make Malibu Road one of the hottest neighborhoods in Malibu and Southern California. Malibu Road stretches for 2.5 miles along the Pacific Coast and runs parallel to the Pacific Coast Highway. Indeed, Malibu Road used to be the Pacific Coast Highway until the state decided to move the highway inland. Now, Malibu Road is fondly referred to as The Old Road by locals. Shopping, beaches, sun, sand, and a life of luxury await you here. Thus, if you are a first-time homebuyer on Malibu Road, you can get started with these six tips.
Pre-approval makes you stand out
Do you want to get a great real estate agent and the attention of any potential sellers? Come in with pre-approval. When you walk into a real estate transaction with the backing of your lender, and you already know your budget, you have real power. It all comes down to making the offer and getting accepted. Pre-approval is the next best thing to walking in with a suitcase full of cash, and no one does that anymore, right?
If you already have a trusted lender, let them know you’re looking for a home on Malibu Road. If not, get a referral from someone you trust and establish a relationship with a loan agent. Your lender will ask for personal information, like your social security number and income, among other things, and then give you a number. That number is what you now have to work with when it comes to finding a house and making an offer. It essentially becomes the top end of your budget.
Make sure you have a great realtor
Look, it’s wonderful that so many Americans seem to be returning to a sense of rugged individualism and doing things for themselves. At the same time, real estate is not an area to DIY. You might think you’ll save money or that you can do it better than anyone else because you know what you want and you’re savvy, but having a real estate agent is statistically likely to save you money and get you what you want. Plus, the buyer does not pay for the real estate agent. The agent’s commission comes out of the sale price. You’ve got nothing to lose and so much to win.
A great realtor will know the area well, have negotiating experience, and guide you objectively toward the best price points to hit. You can also count on a realtor to have excellent connections that can help you with things like getting a good inspection and hiring a contractor for any work you’d like to have done after you close. Your realtor is your best friend through this process. Use them. Your best bet for finding a top-quality realtor is to ask people you know for referrals and read online reviews and testimonials. Plus, always trust your gut feelings when you first meet.
Figure out how much you want to put down
You’ve probably heard that you have to put 20% on any house you buy. It’s not true. The rule of thumb is that you’ll need to put 20% of the total loan price down to avoid having to pay PMI or private mortgage insurance. Lenders will require you to have PMI if you don’t put 20% down, so they are protected in the event you default on the loan. But sometimes, you’re better off paying the PMI and stashing the cash. When?
If all you have is 20% of the loan in liquid funds, you might want to hold onto at least some of that in the event of an emergency, like loss of income, a medical situation, or a natural disaster.
On the other hand, if you have extra liquidity, you may want to consider putting down the full 20% or more to get your mortgage payments lower and avoid the PMI. It is a consideration worth taking and a conversation worth having with your family and any trusted financial advisors you have.
Don’t forget property taxes
About those monthly mortgage payments… Typically, property taxes are built into your mortgage payments, collected by your lender, so you don’t have to come up with one lump sum every quarter, every six months, or at the end of each year. Property taxes are determined by your county, and Malibu is in Los Angeles County, where the property taxes
are .82%. With a median home price
of two million, that means around $170,000 added to your mortgage each year. Split into 12 months, you’ll need to plan to spend an extra $14,000 a month in taxes alone, and that’s on the low end. It’s an important calculation to make when deciding how much house to buy.
Educate yourself on the best loan for you
Now you’re pre-approved, you love your realtor, and you found the home you want after all your financial calculations. It’s time to choose a loan. Your mortgage loan will determine your base mortgage payment because of the total loan price and the interest rate. First, figure out if you might qualify for any kind of FHA loan. That's the Federal Housing Association. The government has all sorts of programs to help teachers, police officers, firefighters, and other professionals doing good for society. You can also look into a VA loan if you’re a veteran.
Then there are the traditional conventional loans and adjustable rate loans. Conventional loans lock you into an interest rate for a set term. Adjustable rate loans typically start low and then shoot up after a predetermined amount of time. Finally, there are first-time home buyer loan programs you can look into to help you with things like closing costs and down payments.
Enroll in a homebuyer education course
Don’t worry. You don’t have to figure this all out alone. You can take a homebuyer education course, online or in person, to help you understand your loan options, what to look for in your first home, and all the other things you will need to consider when taking on the largest loan of your life. You may be required to enroll in one of these courses to qualify for an FHA or first-time homebuyer loan. It’s a win/win situation.
Work with Mark Gruskin, your trusted realtor
If you’re ready to start looking at homes for sale on Malibu Road, look no further than Mark Gruskin
. With a background in both real estate and law, Mark is a strong, stable expert in West Los Angeles real estate. He has helped numerous clients buy and sell their houses, and he has accumulated a wealth of testimonials
and awards attesting to his professionalism and his ability to get his clients what they want. Contact Mark today
and get your real estate journey started.
*Header photo courtesy of Shutterstock