There are many great Orange County and Coachella Valley area homes for sale. Click here to perform full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at (949) 441-0701 for a FREE home buying or selling consultation to answer any of your real estate questions.
Interest rates are rising, so how will your buying power be affected? Furthermore, how do you determine your buying power?
The first thing I would recommend is to find a good lender and have them run your credit score. After this, they’re going to examine your debt to income ratio. Some people who run businesses that use a lot of cash will have trouble at this point. Your sources of income have to be documented, otherwise this could hurt your debt ratio score.
All of these things will help to determine your buying power, but you will also need to figure out how much you can put towards a down payment. You want to try to put 20% down to avoid paying private mortgage insurance, but you don’t want to stretch yourself too thin. If you're a veteran, take advantage of a VA loan, and if you're buying in a rural area, you can use a USDA loan. There are many different loan products that can help you put a larger down payment towards a house.
Lastly, what are your total assets and your total debts? Consider your total debt that may not show up on a credit report.
It’s important to know your buying power before looking at homes. When you know what you can afford, the home search process becomes much more simple.
If you have any questions, please don’t hesitate to contact me. This is an excellent year to buy a home, so don’t miss out on this opportunity because you’re unprepared!
