First-Time Homebuyer Guide
Buying a house for the first time in LA doesn’t have to feel overwhelming. This guide walks you through every step from mortgage pre-approval to closing day so you can find your perfect home with confidence.
What First-Time Home Buyers Need to Know
The Los Angeles real estate market moves faster and costs more than most places in America. Homes in desirable neighborhoods get multiple offers within days, sometimes hours. Median prices vary dramatically from one community to another. For example, a condo in Glendale costs half what you’d pay in Santa Monica.
Understanding these realities helps you compete. First-time buyer programs and down payment assistance options exist specifically for LA buyers, but you need to know where to look. Interest rates, credit score requirements, and loan options determine how much house you can actually afford, not just what you want to spend.
The good news? Thousands of first-time home buyers successfully purchase properties across Los Angeles County every year. With the right preparation and guidance, you can too. This guide gives you the home buying tips and strategies that work specifically in LA’s competitive market.
Your Complete Home Buying Timeline
Check Your Credit Score and Financial Health
Qualifying for a mortgage starts with your credit score. Most lenders require a minimum of 620 for FHA loans and 680+ for conventional loans with competitive rates. Review your credit report, pay down existing debt, and avoid opening new credit lines for at least six months before applying.
Calculate Your Budget and Down Payment
Determine how much home you can afford by using the 28% rule, meaning your monthly housing costs shouldn’t exceed 28% of your gross income. Include property taxes, homeowner’s insurance, and any HOA fees. First-time buyers can expect down payments from 3.5% to 20%, with CalHFA and LA County programs available to help qualified buyers cover upfront costs.
Get Mortgage Pre-Approval (Not Just Pre-Qualification)
Pre-approval and pre-qualification aren’t the same. Pre-qualification is an estimate based on information you provide, while pre-approval involves verifying your finances through documents and credit checks, showing sellers you’re a serious buyer. To prepare, gather two years of tax returns, recent pay stubs, bank statements, and investment account details.
Find a Buyer's Agent Who Knows LA
The right real estate agent makes all the difference in competitive markets. Look for someone who specializes in first-time home buyers, knows your target neighborhoods, and responds quickly when opportunities arise. Buyer's agents typically cost you nothing as the seller usually pays the commission.
Start Your Home Search
Tour properties to understand what you can get for your budget. Visit open houses, schedule private showings, and explore different LA neighborhoods. Most buyers tour 10-15 homes before finding "the one."
Make a Competitive Offer
Your agent crafts an offer strategy based on comparable sales, current market conditions, and how many other buyers are interested. Include contingencies in real estate contracts that protect you, such as inspection, appraisal, and financing contingencies which are standard.
Navigate the Escrow Process
The escrow process in California typically takes 30-45 days. During this time, you'll complete home inspections, finalize your loan, review seller disclosures, and conduct a final walk-through before closing. Your escrow officer coordinates everything and ensures all conditions are met.
Close and Get Your Keys
On closing day, you sign final documents, wire your down payment and closing costs, and officially become a homeowner. Congratulations! You've completed the home buying timeline.
How Much House Can You Afford?
Down Payment Requirements
FHA Loans: 5% down payment minimum (popular with first-time buyers)
Conventional Loans: 5-20% down payment
VA Loans: $0 down for qualified veterans and military members
First-Time Buyer Programs: Down payment assistance up to $100,000 available through LA County and CalHFA
Monthly Housing Costs to Consider
Your mortgage payment is just one piece. Budget for:
Principal and Interest: The main mortgage payment
Property Taxes: Approximately 1.25% of purchase price annually in LA County
Homeowner’s Insurance: $1,200-$2,500 per year depending on location
HOA Fees: $200-$600+ monthly for condos and townhomes
Mello-Roos Taxes: Special assessments in newer developments for infrastructure
Credit Score Requirements
Lenders evaluate your credit score to determine loan eligibility and interest rates. Higher scores mean lower rates, which saves thousands over the life of your mortgage. If your score needs improvement, focus on paying bills on time, reducing credit card balances, and avoiding new debt.
Where to Buy Your First Home in Los Angeles County
Burbank
Median Price: $850K-$950K
Family-friendly with great schools, walkable downtown, and close proximity to studios. Ideal for young professionals and growing families.
Glendale
Median Price: $800K-$900K
Strong Armenian community, excellent restaurants, and more affordable than neighboring Pasadena. Good starter home inventory.
Pasadena
Median Price: $950K-$1.1M
Historic charm, Rose Bowl proximity, and vibrant Old Town. Higher price point but strong appreciation potential.
North Hollywood (NoHo)
Median Price: $700K-$850K
Arts district energy, Metro accessibility, and improving neighborhoods. Great for buyers prioritizing location over space.
Eagle Rock
Median Price: $900K-$1M
Hip, eclectic community with local shops and restaurants. Popular with creative professionals and young families.
Van Nuys
Median Price: $850K-$915K
Centrally located and versatile, offering comfort and accessibility. Ideal for young professionals and growing families.
5 Mistakes That Cost First-Time Home Buyers Money
Skipping Mortgage Pre-Approval
Shopping for homes without pre-approval wastes time and sets you up for disappointment. Sellers won't take your offer seriously without proof you can actually secure financing.
Making Emotional Offers
Falling in love with a home and overbidding based on emotion, not value, leads to buyer's remorse. Stick to your budget and let market data guide your offer price.
Skipping the Home Inspection
Never waive your inspection contingency to make your offer more competitive. A thorough home inspection checklist reveals foundation issues, electrical problems, plumbing defects, and pest damage that could cost tens of thousands to repair.
Not Understanding Contingencies
Contingencies in real estate contracts protect buyers. Inspection, appraisal, and financing contingencies give you exit paths if problems arise. Your agent explains which contingencies to include and when you might negotiate them away strategically.
Overextending Your Budget
Getting approved for a certain amount doesn't mean you should spend it all. Leave room in your budget for furniture, repairs, maintenance, and unexpected expenses that come with homeownership.
What to Expect During Your Home Inspection
A professional home inspection typically costs $400-$600 and takes 2-4 hours. The inspector evaluates the property’s structure, systems, and safety. You should attend the inspection to ask questions and see issues firsthand.
What Inspectors Check:
- Foundation and structural integrity
- Roof condition and remaining lifespan
- Electrical systems and code compliance
- Plumbing, water heaters, and sewage
- HVAC systems and ventilation
- Windows, doors, and weatherproofing
- Pest damage (termites, rodents)
Common LA-Specific Issues
- Earthquake retrofitting and foundation bolting
- Older electrical panels (many LA homes have outdated wiring)
- Galvanized plumbing in pre-1970s homes
- Asbestos and lead paint in older properties
Using Your Inspection Contingency
After receiving the inspection report, you have three options: request repairs, negotiate a price reduction, or walk away if issues are too severe. Your agent helps you determine which problems are deal-breakers versus normal wear-and-tear.
From Accepted Offer to Keys in Hand
The escrow process protects both buyers and sellers by using a neutral third party to hold funds and documents until all conditions are met. In California, escrow typically lasts 30-45 days.
Week 1-2: Opening Escrow
You deposit earnest money (usually 1-3% of purchase price) to show you're serious. Schedule your home inspection, review preliminary title reports, and submit final loan documentation to your lender.
Week 2-3: Inspections and Appraisal
Complete property inspections and negotiate any necessary repairs. The lender orders an appraisal to confirm the home's value matches the purchase price. If the appraisal comes in low, you'll need to renegotiate or bring additional cash to closing.
Week 3-4: Loan Processing
Your lender finalizes underwriting, verifies employment, and issues final loan approval. Obtain homeowner's insurance quotes and select a policy—coverage must be in place before closing.
Week 4+: Final Walk-Through and Closing
Conduct a final walk-through 24-48 hours before closing to confirm the property's condition and that agreed-upon repairs were completed. On closing day, you sign documents, wire your down payment and closing costs, and receive the keys to your new home.
Closing Costs to Budget For:
- Loan origination fees (0.5-1% of loan amount)
- Title insurance ($1,000-$3,000)
- Escrow fees (split with seller typically)
- Recording fees ($50-$200)
- Property tax prorations
- HOA transfer fees (if applicable)
Total closing costs typically run 2-5% of the purchase price.
How a Buyer's Agent Helps You Win
First-time home buyers who work with experienced agents get better outcomes. Here’s why:
You Don't Pay the Commission
Seller pays buyer's agent commissions as part of the transaction. You get expert representation, negotiation skills, and market knowledge at no direct cost to you.
Access to Listings and Market Data
Agents see new listings the moment they hit MLS, often before they appear on Zillow or Realtor.com. In LA's fast market, being first to know about properties gives you a competitive advantage.
Negotiation Expertise
Your agent handles offer strategy, counteroffers, inspection negotiations, and closing challenges. They know what terms work in competitive situations and how to craft offers that sellers actually accept.
Transaction Management
From escrow opening to final closing, your agent coordinates with lenders, inspectors, title companies, and escrow officers. You focus on preparing to move while they handle the details.
Local Market Knowledge
LA neighborhoods vary dramatically in pricing, school quality, crime rates, and future development. An experienced local agent guides you toward areas that match your budget and lifestyle while avoiding overpaying.
Financial Help for Los Angeles First-Time Buyers
CalHFA Programs
The California Housing Finance Agency offers down payment assistance up to 3.5% of the purchase price for qualified first-time buyers. Programs include MyHome Assistance and CalPLUS conventional loans.
LA County Home Ownership Programs
The LA County Development Authority provides second mortgage loans up to $100,000 for down payment and closing cost assistance. Income limits apply based on household size and property location.
City of Los Angeles LIPA/MIPA
Low-Income Purchase Assistance (LIPA) and Moderate-Income Purchase Assistance (MIPA) help first-time buyers purchase homes within LA city limits with deferred-payment second loans.
FHA Loans
Federal Housing Administration loans require just 3.5% down and accept credit scores as low as 580. FHA loans are popular with first-time buyers who have limited savings but stable income.
VA Loans
Veterans, active military members, and qualifying spouses can purchase homes with $0 down payment and no private mortgage insurance through VA-backed loans.
Greenline Home Program
The Greenline Home Program offers up to $35,000 in down payment or closing cost grants to eligible first-time buyers in high-need LA County areas, forgivable after three years of occupancy.
Is Now the Best Time to Buy a House?
Building Equity vs. Paying Rent
Every mortgage payment builds equity in an asset you own. Rent payments build your landlord’s equity. Over time, homeownership typically creates wealth through appreciation and forced savings.
LA Market Appreciation
Los Angeles County home values have appreciated an average of 5-7% annually over the past decade. While past performance doesn’t guarantee future results, real estate historically outpaces inflation as a long-term investment.
Tax Benefits
Homeowners can deduct mortgage interest and property taxes (up to certain limits) on federal tax returns. These deductions reduce your effective housing costs compared to renting.
Stability and Control
Owning means no surprise rent increases, no landlord restrictions on pets or renovations, and stability for your family. You control your living environment completely.
When Renting Makes Sense
If you’re uncertain about staying in LA for at least 3-5 years, renting offers flexibility. Job changes, lifestyle shifts, or financial instability might make homeownership premature. Honest assessment of your situation matters more than pressure to buy.
First-Time Home Buyer Questions Answered
How much do I need for a down payment in Los Angeles?
Down payment requirements range from 0% (VA loans) to 20% (conventional loans). FHA loans require just 3.5% down, making them popular with first-time buyers. Many LA buyers put down 5-10% and use down payment assistance programs to cover the rest.
What credit score do I need to buy a house?
Most lenders require a minimum credit score of 620 for FHA loans and 680+ for conventional financing with competitive rates. VA loans are more flexible. If your score is below 620, focus on improving it before applying—pay down credit card balances, make all payments on time, and avoid opening new accounts.
What's the difference between pre-qualified and pre-approved?
Pre-qualification is an estimate based on information you provide without verification. Pre-approval involves submitting documentation, credit checks, and lender verification—it's a conditional commitment to lend you money. Sellers take pre-approved buyers seriously; pre-qualified buyers not so much.
How long does it take to buy a home in Los Angeles?
From starting your home search to getting keys typically takes 3-6 months for first-time buyers. The timeline includes getting pre-approved (1-2 weeks), finding your home (1-3 months), and completing escrow (30-45 days). Competitive markets may require multiple offers before one gets accepted.
Can I buy a house with student loan debt?
Yes, but lenders include student loan payments in your debt-to-income ratio calculations. High student loan debt reduces how much mortgage you qualify for. Some buyers pay down student loans before applying to improve their borrowing capacity.
Do I really need 20% down to avoid PMI?
Private Mortgage Insurance (PMI) applies to conventional loans with less than 20% down, typically costing 0.5-1% of the loan amount annually. Many first-time buyers accept PMI to purchase sooner rather than waiting years to save 20%. PMI drops off once you reach 20% equity through payments and appreciation.
What are contingencies and why do they matter?
Contingencies are conditions that must be met for the sale to proceed. Standard contingencies include inspection (you can back out if major issues are found), appraisal (protects you if the home doesn't appraise for purchase price), and financing (you're not obligated to buy if your loan falls through). Contingencies protect buyers from losing earnest money if problems arise.
When is the best time to buy a house in Los Angeles?
The best time to buy depends on market conditions and your personal readiness, not the calendar. Historically, spring and summer see more inventory but also more competition. Fall and winter have fewer listings but also fewer competing buyers. Focus on getting pre-approved, saving your down payment, and being ready to act when the right home appears.
What closing costs should I expect?
Plan for 2-5% of the purchase price in closing costs. This includes loan origination fees, title insurance, escrow fees, property taxes, HOA transfer fees, and recording charges. Some costs are negotiable; others are fixed. Your lender provides a Loan Estimate detailing all costs within three days of application.
Real Buyers, Real Results
Ready to Start Your Home Buying Journey?
You’ve learned the steps to buying a home, understood financing options, and discovered programs that help first-time buyers in Los Angeles. Now it’s time to take action. I’ve helped dozens of first-time home buyers navigate LA’s competitive market and find homes they love. Whether you’re ready to start searching or still have questions about the process, I’m here to guide you every step of the way.
No obligations. No pressure. Just expert guidance to help you become a Los Angeles homeowner.