Dertermining If Anaheim Ca Homes For Sale Are Affordable
If you are in the market of looking for Anaheim Ca homes for sale, there are some things that you need to first consider. Is the home you are looking at affordable? As a general rule of thumb, most people can afford a house worth about three times their annual gross income. Now, this is assuming that you were able to come up with a twenty percent down payment on the home and your other long term debts are at a moderate level. If you have no other outstanding debts you should be able to afford a home upwards to four or five times your annual gross income.
The first thing a prospective buyer needs to accomplish that will assist in determining if they can afford a home is, prepare a financial statement. This financial statement should include your monthly income, your monthly expenses, and your net worth (your assets minus your liabilities). This will help you develop a criteria that reflects the mortgage payment amount you can realistically afford. When it comes time fill out your loan application the financial statement information you have collected will come in handy as well. Once you have determined the amount you can afford, only shop for homes in the Anaheim area that fit your criteria. It really does not matter how much debt a lender says you can afford. Ultimately you as the buyer determines what you feel is a comfortable monthly mortgage payment that you are willing to commit to each and every month. What this means is, now is not the time to exaggerate your income, or underestimate your expenses. Lets be realistic here, and when you make that first payment you will be glad you did.
The next thing a buyer needs to determine is what the down payment and closing costs will be. Typically a buyer needs to come up with five to twenty five percent of the homes value for their down payment in order to qualify for the loan. While a number of lenders offer first time buyer programs with as little as three percent down, these are generally not the best choice. These type of first time buyer loans usually come at a higher than average interest rate and contain prepayment penalties. If a buyer can come up with a larger down payment it will make it easier to qualify for a loan as well result in a lower monthly payment. Another thing a buyer needs to factor into their home purchase is the closing costs. Typically a buyer will be expected to pay two to five percent of the cost of the home in closing costs. This pays for the Realtor’s fees and the property listing fees. You will also need to have sufficient reserves to pay two to three months worth of your PITI. PITI simply stands for principal, interest, taxes, and insurance.
By taking into consideration these simple facts you will be able to determine what you can afford and the Anaheim Ca home for sale that is right for you.
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