Before making an offer, the pre-qualification process from a lender, which is based on income, debt, and credit score, helps you determine how much you can borrow. Having this document can make your offer more credible to sellers, but preparing documents like income verification and bank balance checks can be time-consuming.

If you are going through this process in Santa Monica, you need to realistically set your budget. The median sale price is around $1,743,956 (as of May 2026, Redfin). While a 20% down payment requires about $349,000 in cash, applying a loan of $1,395,000 at an interest rate of around 6.6% results in a monthly principal and interest payment of about $8,900, which can be a burden.

There is also the option to lower the down payment ratio. An FHA loan can start at 3.5% if your credit score is 580 or higher, which reduces the initial cash burden, but it also increases the loan principal and adds mortgage insurance (FHA.com). Conventional loans can be available from 3% for first-time homebuyers or those with an area median income of 80% or less, with many typically preparing around 5%. If the down payment is less than 20%, PMI applies, while amounts over 20% eliminate this cost, which is another factor to consider.

You can estimate property taxes based on the average effective tax rate of 0.69% in Los Angeles County (propertytaxrates.org, as of 2026). However, some areas may have additional local bonds or special assessments, so it's safer to check the actual tax rate based on the property address rather than just relying on the lower average.

First-time homebuyers should also consider the CalHFA MyHome Assistance Program. It can provide assistance of up to 3% of the purchase price or appraised value for down payment or closing costs, which is advantageous, but you must meet first-time homebuyer requirements, income limits, and complete homebuyer education (CalHFA).

Korean families looking at school districts often refer to the Santa Monica-Malibu Unified School District's ratings. However, school district boundaries change frequently, so it's advisable to verify the assigned school for a property before purchasing.

If you are moving from another state and are used to renting, it's important to reassess whether buying or renting is more advantageous. While buying builds equity, the initial cash and monthly payment burdens are significant considerations.

Closing costs are typically estimated to be between 2% and 5% of the purchase price. This includes appraisal fees, inspection fees, title insurance, and escrow fees.

The MyHome Assistance Program can also be applied in conjunction with CalHFA's first mortgage products, which is another beneficial aspect (CalHFA). However, if your credit score is low, the interest rates offered may be less favorable, so it's wise to check your credit report before making an offer.

During the offer stage, it's common to include an earnest money deposit of 1% to 3% of the purchase price. While you can get this back if issues are found during the inspection period, in a competitive market, the size of the deposit can also serve as a negotiating tool. If interest rates are volatile during the contract period, it may be worth considering a rate lock option in advance.

This article is not investment or legal advice, and you should consult with a loan officer or real estate professional to confirm conditions that suit your personal situation before finalizing any contracts.