Home buyers: Be comfortable with your mortgage…. a smart decision.
How much home do you qualify for??? This is what many agents ask their buyers. I urge my clients to take a look at their spending habits, SAVING goals and then make a decision regarding the TOTAL out-of-pocket monthly expense they are comfortable with on housing. Just because you qualify for a $400,000 or $500,000 home purchase, does not mean it makes long term sense in regards to your financial goals. There are many things to consider. Having a good loan officer to lay out ALL the housing related expenses is crucial in making a good decision. And your agent can make sure that loan officer is showing you all the pieces. Many loan officers (the ones I steer my clients from), will quote you a “payment” that doesn’t include the other expenses. As a professional, I believe we are responsible for informing you of all the costs related to owning property. Here are the things to be considered:
· Ask for the PITI total payments for different price points. PITI = Principal Payment, Interest, Property Taxes and Insurance. Your agent can provide the local tax rate OR you can contact the county assessor’s office directly (that stuff is public knowledge).
· Obtain a good faith estimate (GFE) and know your total out of pocket. Are you paying points on the loan to buy down the rate? That should be discussed with you up front and not brushed over.
· What are your lender’s fees? These will also be disclosed on the GFE. Look for suspicious fees, such as “sub-underwriting” and various processing fees…. In the industry we call them junk fees and they’re just making the lending brokerage more money.
· Is there any Mela-Roos? Or HOA? If you are buying a condo or a home in a planned development with an HOA, you need to consider the extra out-of-pocket expense.
· Finally, consider the cost of upkeep. You will want to put away reserves every month so you can build up a fund to pull from if you need to replace the water heater, repair plumbing or get a new roof! A lot of buyers don’t consider the inherent expense of owning a property.
Being a well informed buyer will make ALL the difference 1, 2, 5 years down the road and make for a much more enjoyable home ownership experience! After all…. I want all my clients that are buying San Diego Condos or Homes to increase their quality of life by a home purchase. That definitely means avoiding a potential house-poor situation if stretching too far.
Tara Steinke
Agent / Appraiser
Coldwell Banker Residentail
619-384-6014
SDRealtor.Tara@gmail.com
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Tara is your San Diego condo and home expert - For buyers and sellers alike, her extensive experience, including work as a professional Real Estate Appraiser in the San Diego area provides a unique perspective in negotiating the best deal for her clients, and gives those looking to buy or sell a San Diego Condo or Home the peace of mind that they will be positioned effectively in today's changing real estate market.
Tara is Licensed by the CA DRE#01426882
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