Deciding to Own
How Much House Can You Afford?
How much you can afford really depends on a number of factors. One factor is how much of a loan you can qualify for with a reputable lender. This takes into account your credit history, how much of a down payment you can accumulate and your debt to income ratio. Lenders generally allow for about a third of your income to be applied to your housing payment. Other factors you’ll take into account before choosing a home are location, size, condition, age, amenities and view.
Benefits of Home Ownership
The tax benefits associated with owning your home truly make it a taxpayer’s dream come true. Please consult your tax professional to make sure you take advantage of all the benefits you’re entitled to. Also, statistics show how communities improve in relation to the rate of homeownership as well as children obtaining better grades in school.
Quite possibly our favorite benefit is the use of leverage or OPM (Other Peoples Money). To buy stock worth $500,000 you’d need to actually have $500,000 to purchase the stock. Conversely, to buy a home or condo worth the same amount, $500,000, you have options. You can pay an initial down payment of 5 to 15% or possibly finance the entire amount. Either way your ROI (Return on Investment) significantly increases as your home goes up in value. We’d love the opportunity to show you how to put the power of leverage to work and gain lasting financial freedom.
Down Payment
Home buyers usually believe that saving enough money for a down payment is the biggest hurdle to owning a piece of paradise here in San Diego. So how much down payment does it take to own you may be asking. Great question. Your decision will be dictated by your financial circumstances, the type of loan you choose, and your risk tolerance. If you’re financially secure, you may want to go ahead and put 10% to 20% down. On the other hand, you may want to leverage yourself, putting down as little as possible, that way you’ll have more liquid cash to invest.
Market Conditions
What is our San Diego real estate market doing right now? Think Economics 101, Supply vs. Demand. Are there more buyers buying than sellers selling? Are prices shooting up at 20% with multiple offers on homes that sell within 48 hours? If so, we are experiencing a seller’s market. However, if more sellers are selling than buyer’s buying we may be in a buyer’s market. In a buyer’s market the supply of listed homes exceeds buyer demand. Between these two extremes are more balanced market conditions. It is advantageous to check the pulse of the market with an experienced agent and lender. Market conditions fluctuate consistently and we pride ourselves on keeping you informed and empowered with up to date analysis and statistics on current market conditions.
Own vs. Rent
Are you tired of paying rent with nothing to show for it? The benefits to owning your own home are numerous and rewarding. The money you spend on rent every month could be put towards gaining long term financial security and stability. Log onto www.ginniemae.gov and use their Buy vs. Rent calculator to check the numbers for yourself.
