Buying a home is exciting, but it can also feel overwhelming — especially if it’s your first time. At Arbor Real Estate, we hear the same questions come up again and again. Below, we’ve pulled together answers to some of the most common FAQs to help guide you through the process.
What’s the difference between pre-approval and pre-qualification?
Pre-qualification is a quick, surface-level review of your finances. A lender gives you an estimate of how much you may be able to borrow, usually based on self-reported information.
Pre-approval goes much deeper. The lender verifies your income, credit, and assets, and issues a letter stating how much you are approved to borrow. 👉 In today’s competitive Orange County market, a pre-approval carries far more weight with sellers and is highly recommended before you start making offers.
How much money do I need for a down payment?
Contrary to popular belief, you don’t always need 20% down.
Many buyers put down 5–10%, and some loan programs allow as little as 3% down.
However, putting down 20% can help you avoid private mortgage insurance (PMI) and reduce your monthly payment.
Your exact down payment will depend on your loan type and financial goals, but the key is to have enough saved to feel comfortable with your mortgage and closing costs.
What are closing costs, and how much should I expect to pay?
Closing costs are the fees and expenses due at the end of a transaction, beyond your down payment.
These may include:
Lender fees
Title and escrow charges
Appraisal and inspection fees
Property taxes and insurance
On average, closing costs range from 2% to 5% of the purchase price. For a $1 million home in Newport Beach, that could mean $20,000–$50,000 in closing costs.
How long does it take to buy a home?
The timeline can vary, but most transactions take about 30–45 days from the time your offer is accepted until you get the keys.
The factors that can speed things up or slow them down include:
Loan approval process
Inspection and appraisal timing
Negotiations over repairs
If you’re paying cash, the process can be much quicker — sometimes as fast as 7–10 days.
What’s the difference between a fixed-rate and an adjustable-rate mortgage?
A fixed-rate mortgage locks in the same interest rate for the life of the loan. Your monthly payment stays consistent.
An adjustable-rate mortgage (ARM) starts with a lower rate for an initial period (say, 5 or 7 years), then adjusts periodically based on market rates.
Fixed rates offer stability, while ARMs can be appealing if you plan to sell or refinance before the rate adjusts.
Should I buy a home now or wait for interest rates to drop?
This is one of the biggest questions buyers ask today. Here’s the reality:
If rates drop, home prices often rise because demand surges.
If you find the right home and can afford the payment now, it often makes sense to buy and refinance later if rates improve.
Timing the market perfectly is nearly impossible. Focus on your lifestyle needs and long-term goals rather than short-term rate changes.
What is escrow, and how does it work?
Escrow is a neutral third party that manages the funds, paperwork, and instructions between buyer and seller during a transaction.
In California, escrow ensures:
Your deposit is held safely
Title is transferred properly
Funds are disbursed once all conditions are met
Think of escrow as the “traffic controller” of the real estate process — keeping everything organized and ensuring both sides fulfill their obligations before closing.
Final Thoughts
Buying a home in Orange County is one of the biggest financial and lifestyle decisions you’ll make. Having clear answers to these FAQs can take away a lot of uncertainty and help you move forward with confidence. If you’re ready to start your home search, Arbor’s team of experienced local agents is here to guide you every step of the way.