How much does it actually COST to BUY a HOUSE in CALIFORNIA – Can you AFFORD to BUY?

Warren Oberholser
Warren Oberholser
Published on December 12, 2020

Learn what it takes to purchase a home in California.

How much does it cost to buy a home in California? That’s a great question, and I’ve got the answer. It’s all coming up.

Hi, I’m Warren Oberholser. I’m a realtor in the East Bay Tri-Valley area in Northern California. My goal is to help both buyers and sellers get maximum results for one of their biggest investments, their home.

A question I’m often asked is, how much does it cost to purchase a home in California? This is a great question. Of course, when I say, “How much does it cost?”, it all depends on how much the price is on the home you want to purchase. As I said in the beginning, I’m located in the Tri-Valley area. The medium house price in this area is a little over a million.

Now, if we’re to go down South about 40, 50 miles to the Silicon Valley area, and this is where the tech companies are, like Google, LinkedIn, and Facebook, the price there is going to be 1.6 million. That’s the average price. But, if we travel East and we go again about 40, 50 miles to the San Joaquin area, the price there is drastically lower, which is about $450,000.

So in order to correctly calculate how much it costs to purchase a home in California, we need to first establish what the purchase price will be, or purchase price range.

All right, the next item is, how are you going to pay for the home? Will it be financed, or will it will be cash? For this example, we’ll use financing. There’s three types of loans you can get. There’s FHA, VA, and conventional. I’m not a loan agent, so I recommend you do reach out to a mortgage expert to answer any questions you have on this.

If you don’t have a loan agent, I recommend reaching out to Brian LeBars from Vintage Home Loans in Pleasanton. You’ll find his contact information listed below in the show notes. Each loan has their own guidelines and rules. Most loans will have a minimum down payment required. However, there’s some products that don’t, such as VA.

Down payments for conventional loans can be as low as three to five percent. However, if you do put less than 20% down, you will have to pay your monthly mortgage insurance. FHA minimum down payment is 3.5%.

Okay, so here’s the breakdown. The first thing we have to calculate is, what are your closing costs? Closing costs are fees that are generated when you are purchasing a home. Now, there can be several. You first have title insurance and escrow fees. Next is home inspection fees. This covers your roof, your termite, and the home inspection. The last is lender fees. This covers anything the lender may charge you. The area that I’m not going to get into is buying down points or interest rates. This is a very specific subject that you’ll discuss with your lender.

So, when you add all this up, these fees will generally be equal to 3% of the home purchase. So if the purchase price of your house is a half a million, then 3% of that will be $15,000. So, you have an FHA loan with a down payment of 3.5%, which of $500,000 is $17,500. So the total of your closing costs, which is 15,000 plus the down payment, which is 17,500, your grand total will be $32,500. That’s what it takes to buy a home in California.

Now here’s my bonus. To help you calculate what your monthly mortgage payment is, please get my free mortgage calculator.

💰 Free Mortgage Calculator 💸

I hope you enjoy this article. Please email me any questions you may have. [email protected]

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About Warren Oberholser

Hello…I work with both buyers and sellers in the Tri-Valley area of Northern California. The Tri-Valley is comprised of 6 cities: Pleasanton, Livermore, Dublin, San Ramon, Danville, and Alamo. To better understand what each city has to offer, I have created a Pros and Cons video and BLOG for each – (Pros & Cons for Pleasanton, Pros & Cons for Livermore, Pros & Cons for Dublin, Pros & Cons for San Ramon, Pros & Cons for Danville and Pros & Cons for Alamo). If you are thinking about purchasing or selling a home, please reach out to me by text, phone, or email. If it is convenient, I can schedule a Zoom chat so we can discuss your home goals. Wishing you all the best on your home journey. Cheers!

Warren Oberholser

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Brian LeBars MLO #239905 Vintage Home Loans An Equal Housing Lender CA Department of Real Estate License #01715112 & #02072832 Direct 925-708-5400 Fax: 925-889-5626 344 Division St., #100 Pleasanton, CA 94566 http://vintagehomeloans.com

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