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Financial Planning for Home Buying

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Whether you are thinking of buying a home this year or next year, there are some important factors to consider. A few questions to begin are:

  • How much will you have for a down payment?
  • How much down payment do you need?
  • How much can you afford each month?
  • How much will a bank lend you?
  • How much are you willing to pay back?

These questions may seem daunting, but I can help you answer them. Many buyers believe they need a down payment of 20% or more, but that is not always the case. There are some loan programs that require as little as 3.5% down. When thinking of a down payment you’ll want to think about your overall budget for a home. You will want to consider what your monthly payment will look like when deciding what your budget will be. This is why getting pre-approved is a great first step to home buying. Through the pre-approval process I can help you determine what a bank is willing to lend you and what that will look like on your finances.

Apart from the above questions, you need to keep your credit score in mind. I always tell borrowers, “Your car payment guy doesn’t care about your house payment, but your mortgage guy cares about your car payment.” When applying for a loan don’t take on new credit in the form of credit cards or car loans. This can negatively affect your credit score and may put your home loan at risk.

When deciding on your mortgage options we will take a look at you Debt To Income Ratio. This is a ration that shows how much monthly debt you have with your housing payment, plus other payments compared to your gross income before taxes. Keeping your debt low can go a long way to helping you get the loan you need for the house you want.

This may be a lot of information to consider, but we can help you through the loan process.

Do Low Interest Rates Make A Difference?

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Recently rates dropped to below 3%, which is a new low we have not seen for many years. In the midst of a pandemic this can be great news for many people who are looking to buy a home. Here in San Diego low rates can definitely help to make buying a home more affordable, but the amount of change it will make in the overall market may not be that much.

Home prices in San Diego have continued to rise over the past few years, and even now during the pandemic. This is a result of a continued low inventory of available homes over many years. At the beginning of the year there was already a low inventory, but once the state started to close down many sellers pulled their homes out of the market, understandably so. The homes that were still left started selling faster than expected and competition between buyers increased. If you’re thinking of buying be prepared to face some competition and to act fast when you find a home you want.

With unemployment rates still high, this means many people are simply not in the place to buy a home at all. Sadly, San Diego is already a city that can be difficult to afford. Many of the residents that lost their jobs would already have had a hard time affording a home. So while the low rates can help some people to afford a home, they won’t make a big difference in the overall affordability of owning a home in San Diego. Home prices will likely stay constant or possibly rise with continued competition within buyers.

Now, if you were able to maintain your job during this time and are contemplating buying a home, then now may be a great time for you. Requirements are getting tougher for loans, but it is still possible to get a low rate during this time. Let’s discuss your options today. Click here to get started.

For the article this post is based on, click here.

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Increase In San Diego Home Sales

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I recently spoke with 10News about the increase in home sales we have seen over the last few months. This is a nice change to the trend we had been seeing in San Diego. For the past year, home sales had been declining due to factors like rising home prices and high interest rates. With interest rates decreasing over the last few months, sales have been picking up. While this is a good change for home buyers borrowing to purchase a home, the factor that has not changed is home prices. For this reason many buyers are looking outside of San Diego county when deciding to purchase a home.

These are some of the topics discussed, for the full article click here.