COLDWELLBEST REALTY CLINT FREEMAN BROKER ASSOCIATE MAY 2022 –
Purchasing a home is one of the most important decisions you will ever make. Owning a home has new responsibilities tied to it. It is a wonderful experience to know that you’ve finally passed a threshold that
unfortunately many cannot. Pride of home ownership comes along with the ability to do what you want to do with the space and property you own. Here are a few factors one might consider if you are contemplating purchasing a home.
Staying Put & Solid Plans. Does your immediate future include staying in the Indian Wells Valley for more than five years? If so, a home purchase might be a smart idea. In the event you want to bring in quick equity Ridgecrest may not be the place. Home prices here traditionally do not rise as quickly as some of the coastal areas of California. However, a home purchase in the area is a very smart move if you have the long view in mind. Housing values do eventually rise here. In the downturns the market remains rather stable.
Steady Income & Debt. Whether you have a solid base job or are self-employed, you want to make sure a solid income stream will continue. Mortgage lenders will gauge your ability to repay a loan based upon your monthly income vs. the debt load you have. Have a deficit in both of these areas? If so, it will make it harder you to qualify for a loan. Lenders will request documentation showing a strong employment history for at least two years. Funds For Down Payment & Closing Costs. This might be the biggest hurdle in purchasing a home. A home loan will require a 3.5% – 20% down payment depending upon your credit score, debt to income ratio, and the type of loan you are obtaining. Buyer’s closing costs run typically 3% of the home’s purchase price. Saving up for these items puts you one step closer to homeownership.
Credit Score Issues. A solid credit score is another way lenders gauge whether or not you are able to receive a home loan. In general terms, the higher your credit score is the lower your interest rate will be. Lenders want buyers to have a credit score of at least 620. A solid score in the 700s guarantees you’ll be able to purchase. Paying off credit card bills monthly is the best way to build a credit history.
Heavy Debt. Lenders will request information about your monthly income and will want to know how much debt you have. They will calculate your financial info and come up with a DTI, or debt to income ratio. Most lenders require a DTI that floats at 36% or less. If your DTI is 40% or higher most lenders will require you to pay off debt before they will lend.
Mortgage Payment Stretch. Now that interest rates are rising, you’ll be paying a little more in monthly payments. Use the 28/36 rule here. Put no more than 28% of your gross income toward housing costs. Cap your debt, including mortgage payments at 36%. If your mortgage payment puts a crunch on your monthly budget, seek a less expensive home. In the end, purchasing might not be the best option at this time. Waiting for a future market might be the smartest move to make.
Be wise when making such a major purchase as a home. Think out these issues and take the next step toward an informed purchase only when you’re ready! For more go to https://www.ridgecrestcahomes.com/my-post-2
RIDGECREST FACTS AS OF MAY 2022
- To date there are 60 homes on the market ranging from $108,997 to $749,000.
- Past three months’ price per square foot average of sold single-family homes:
- College Heights $200
- NW $167
- NE $163
- SE $159
- SW $163
- RC Heights $165
CALIFORNIA FAST FACTS
- California median home price: $849,080
- Lowest median home price
- Tehama $243,000
- Ridgecrest $270,000
- Highest median home price by region:
- San Mateo $2,280,000 (Source C.A.R)