Learn How Much House You Can Afford Before You Act!!!

 

If you have ever asked yourself what is the "First Step" in buying a new home, the answer is to determine how much house you can afford? Remember the days when families would sit around the kitchen table and discuss the family budget? It is ok if your too young to remember, the point is, this is a crucial first step in determining how much you should spend on a new home. Today, this step is done on a family computer accessing the many mortgage loan calculators you can find on the web.

Please note: the type of calculator I am talking about is the one that starts with your INCOME, DEBT, DOWNPAYMENT, AND MORE. Not the calculators that just estimate payment.

I am here if you have any questions or want assistance, do not hesitate to call Lisa/Broker, Trust Lending Solutions, call direct: 818-359-4145

Here is a brief explanation of each Mortgage Loan Calculator Factors for determining your max purchase price!

Mortgage Loan Calculator Factors

Annual Income

Your annual income is one factor that a lender considers when establishing a baseline for what you can afford to pay every month. When calculating your annual income, you should consider any money you receive on a regular basis, such as your salary or income from investments. It should include your income and your co-borrower’s income if you are buying a home jointly.

Monthly Debt

How much debt you have directly affects how much house you can afford. When determining how much house you can afford, a good guideline to follow is the 36% rule. Your total monthly debts, including your projected mortgage payment, credit card payments, car loans, student loans, and child support, should not exceed more than 36% of your gross income. This is your debt-to-income (DTI) ratio. The lower your DTI, the more money you can borrow and the more options you have for loans.

Once you input your information into our mortgage affordability calculator, we estimate the amount of house you can afford based on a DTI of 36%. If you want to increase your DTI, you can slide the bar to see how it affects the amount of house you can afford. Most loans require that your DTI does not exceed 45%.

Down Payment

This is how much you expect to put down or contribute to the purchase of your home. Whatever you do not put down, the balance will be financed. Many mortgages require as little as 3% down, which may allow you to purchase a home if do not have a lot of savings or you simply want to leave some money in reserves.

Your down payment plays a big part in our affordability calculator. The more money you put down, the more house you can afford to buy. If you do not have a lot of money saved, you could still get a mortgage with little-to-no money down; it would just decrease the amount of house you could afford to buy. You can use money from savings, investments, or other sources to make up your down payment.

It is recommended that you put down 20% of the home’s purchase price; however, through an FHA loan you may be able to put down as little as 3.5%. Members of the armed services can even obtain a home loan without putting down any amount.

Interest Rate

Your mortgage interest rate makes a difference in how much you spend on your home. Our mortgage affordability calculator has a preset interest rate of 4.000, but you can easily adjust that rate according to today’s estimated interest rates. Interest rates change daily, and your lender determines your interest rate based on your credit profile.

Loan Term

How long do you want to finance your home? The longer your loan term, the more house you can afford. The shorter your loan term, the less house you can afford to buy unless you increase your down payment.

Our affordability calculator assumes a 30-year term, which is the most common type of home loan. You can edit your loan term to a 15-year loan or other type if you wish.

Plug and Play

After entering the above information, and your home price estimate should appear. Adjust the numbers as often as you like until you get a price you believe you can live with.

No one expects you to be a mortgage expert overnight, no matter how many calculations you make. That is why it is vitally important to work with a lender at the very beginning of the process. He or she may have information about down payment assistance and other financing incentives, like lender-paid buydowns, to help you comfortably finance your home purchase. They know the lending rules of the road better than anyone.

A knowledgeable lender can also help you anticipate your true housing costs, beyond just paying your mortgage, making you aware, for instance, of the cash you should have set aside for home maintenance and repairs.

Lastly, work with a reputable lender who not only will walk you through the math and tell you the maximum mortgage you can qualify for, but also will counsel you to select only the mortgage that you feel you can afford.

Learn How Much House You Can Afford Before You Act

Take the First Step with Our Home Affordability Calculator

Keep in mind that our house affordability calculator only provides an estimate of what you could afford. You can call me today to get prequalified and to find out how much you can spend on a home.

You should also bear in mind that your mortgage payment includes not just principal and interest, but also taxes and insurance in most situations. Think of the acronym PITI, which stands for principal, interest, taxes, and insurance.

For property tax information, consult the property profile offered by Trust Lending Solutions. The cost of insurance includes your homeowner’s insurance premium, and, when applicable, any mortgage insurance premium and homeowners’ association fees.



Please call me today to get pre-approved and to find out how much you can spend on a home. Lisa/Broker, Trust Lending Solutions is a dba of The Bani Group, Inc., Call Direct: 818-359-4145 or email Lisa@trustlendingsolutions.com

Forecast: California Home Prices Will Slow, But Not Drop, in 2022

By Brandon Cornett | © 2021, LoanLimits.org | All rights reserved


Key highlights from this housing report:
California home prices are expected to rise more slowly in 2022
But home prices in California are not expected to drop in 2022
That’s according to a forecast from the state’s Realtor association
Supply and demand imbalance is putting upward pressure on prices
Overall, the market is expected to remain competitive next year

Last month, the California Association of REALTORS (C.A.R.) published their housing market forecast for 2022. Among other things, the industry group offered some predictions relating to house values.

C.A.R. researchers believe that home prices in California will rise more slowly in 2022, compared to 2021. Quite a bit slower, in fact. But they do not expect to see a drop in prices any time soon.
California Home Prices Predicted to Slow Down in 2022

According to the state’s Realtor association, home-price appreciation in California will slow down considerably in 2022. That’s according to their long-range housing market forecast, published in October of 2021.

C.A.R. predicted that the median home value in California would rise by 5.2% in 2022. In 2021, the median price is projected to rise by 20.3% (by year’s end). So we’re talking about a significant reduction in annual price growth, from 2021 to 2022.
By the end of this year, the state’s median house value could reach $793,100.
By the end of 2022, the median price point is projected to reach $834,400.

(Of course, this is only a forecast for California home prices. It’s the equivalent of an educated guess. No one can predict future housing trends with complete accuracy.)

Their prediction for 5.2% home price growth in 2022 would actually be a move toward normalcy. The 20% gains seen during 2021 are highly unusual and generally not sustainable over the long term. From an economic and market stability, California could actually benefit from a slowdown in home price growth.




So we shouldn’t view this forecast as a negative assessment of the state’s housing market. On the contrary, sales activity is expected to remain steady throughout 2022.

C.A.R. is predicting that California home prices will slow down in 2022. But the market as a whole will likely remain active and competitive next year.
But Prices Are Not Expected to Drop

Given the meteoric rise in house values over the past 15 months or so, it’s only natural to wonder if California home prices will drop in 2022. But that doesn’t seem likely.

A few cities across the state could see a dip in prices during 2022 — or at least a leveling off. But in the majority of California’s local housing markets, home prices are not expected to drop in 2022.

A slowdown, on the other hand, seems likely. That’s what C.A.R. and other forecasters have predicted. The general consensus appears to be that home prices in California and nationwide will wisely more slowly in the months ahead.

Related: Will houses get any cheaper in 2022?

A few weeks ago, the real estate data company Zillow surveyed a group of housing analysts and economists about future real estate trends. Among other things, the group predicted that house values would slow down nationwide.

To quote that report:


“Experts surveyed expect home prices nationwide to increase a cumulative 31.8% through 2025, the equivalent of an average annual rate of 5.7% — far below the current annual appreciation of about 17%.”

This outlook closely matches the C.A.R. forecast for home prices in California, extending into 2022. House values are expected to slow down, but not drop, over the coming months.

Getting your home in top selling condition: The Big Checklist

I have assisted many of our clients in getting started with this checklist by getting organized and help them do this in a way that’s fun, easy and efficient.

I would be happy to speak with you about this very exciting stage in the home selling process!!!

Please call Lisa @818-359-4145 for motivation, encouragement, and support. Feel free to email your questions to Lisab@thebanigroup.com.








HOME INTERIOR: CURB APPEAL

1. Remove toys, equipment, and clutter from the yard.

2. Repair/replace damaged shingles.

3. Repair/replace light fixtures, doorbell, and doorknobs.

4. Fix broken windows, shutters, and torn screens.

5. Clean/repair gutters and HVAC units if needed.

6. Clean or paint the front door and mailbox.

7. Power-wash the exterior, especially around entrances.

8. Wash windows.

9. Mow lawn, trim bushes, and shrubs, weed garden, and add potted plants for color.

10. Sweep or shovel walkway and driveway.

HOME INTERIOR: FINISHING TOUCHES

1. Store, sell, or donate any items you no longer need, like clothing, toys, knickknacks, furniture, appliances, books, games, etc. A buyer needs to picture themselves in your home before they are motivated to purchase.

2. Fix loose doorknobs, leaky faucets, cracked molding, etc. Do a quick walk-through with your toolkit and address any obvious fixes or call a repairperson for the bigger tasks.

3. Replace or repair broken doorknobs, cabinets, light fixtures, outlets, faucets, and vent covers. Making these small updates can have a twofold benefit — improving the appearance of your home, while increasing its energy efficiency.

4. Clean and organize closets. This takes place during the “removal stage of the process” step 1 above – it feels good to let go and clear the way for newness in your life!

5. Refresh rooms with a new coat of paint. Light, neutral colors, which can help open up a room and create space are highly recommended.

6. Shampoo carpet and replace, if needed. Remove those stubborn carpet stains and smells, guaranteed to be a turnoff to buyers.

7. Wash all windows, frames, and sills. Also, vacuum window blinds and shades. Wash and dry window curtains.

8. Open all window shades to create space and let in light. Bake a Pie or Cookies, light an organic – natural candle – no strong scents, fresh flowers near the entrance full of color is always necessary!

9. Store pet supplies and pet dishes. Buyers who do not own pets may be “put off” by pet accessories and smells at first sight.

10. Add an air freshener plug-in in each room. However, keep in mind that heavy air freshener smells can be overpowering. Ask a friend or family member to give you their honest opinion when they first enter a room.

Is 2022 a Good Time to Buy a House?

The straight Answer is Yes!

I like to keep things simple; it helps me stay in the moment and it makes the goal of buying a new home more attainable.  I find that sticking to the facts of what is happening in real time keeps it less complicated as well.

Fact, yes, Mortgage rates could rise in 2022, but historically, rates are still very low!

Fact, yes, it is still a Sellers’ Market, and the competition is still fierce!

Fact, yes, you need to work with an experienced Real Estate agent with a strong network of Affiliates and team members that can all pull together on your behalf to put your offer at the top of the "offer stack" and keep it there!

Fact, if you have not been fully pre-approved by a qualified and thorough Mortgage Broker, you run the risk of getting your offer accepted and not being able to close your loan (see my previous post on getting pre-approved) - call Lisa direct at 818-359-4145 with any/all your questions?

Fact, you need Leverage! Tips for Winning a Bidding War on a house you really want:

1. Up your offer. - Money talks

2. Be ready with your Pre-Approval; does not hurt when the listing agent gets a call from your Mortgage Professional to back up the written Pre-Approval! 

3. Increase the amount you are willing to put down

4. Waive your contingencies; if not able to waive completely; think about shorting the time from 17 to 5 for example

5. Include an escalation clause

6. Have your inspector on speed dial!

7. Get Personal

8. Let the sellers stay longer in the home after close!

9. Comprise where you can; but not on things that make it difficult to resale the home, if needed, in a "low market"

10. Patience; buying a home today can take months, and months - do not give up too soon!

Buying a Home in 2022! KNOW BEFORE YOU BUY RULE

Happy New Year Everyone!

I am wishing you and your families a Wonderful Year Ahead!

Whether you have already decided to buy a home this year or just thinking about it, please think meaningful and thoroughly before proceeding!

The Know Before You Owe rule does not change the importance of preapprovals or pre-qualifications.

The more time and effort you invest in learning about home loans and defining what you want and what you are capable of financing before you select a home, the smoother the path from contract to closing will be.

Suggestion:  Print this Article, discuss with your family, and put it on the refrigerator to help you stay focused on a very big Goal for 2022!

Because the Pre-Approval step is the most important, I wanted to outline what a thorough Pre-Approval looks like.

the PRE-APPROVAL Process:

• Credit, visit www.annualcreditreport.com and take a look at your credit, review with spouse, if applicable, take notes for important questions, follow up and repair any outstanding issues, pay down debt, or establish credit if deemed necessary.
• Work with an experienced and professional mortgage professional that understands the importance of a thorough pre-approval and is willing to do the work! Most of them are not, sadly enough! 
• Mortgage Loan Application, 10 to 20 minutes or longer if done right! During this process, a conversation about what you want and a monthly mortgage obligation you can live with - afford!!! What your goals are regarding your pending home purchase should be thoroughly discussed. Loan options are discussed, different scenarios, as well as your questions and concerns.
• During the application process, this is a perfect time for the mortgage professional to spot any potential issues that need to be repaired and resolved for qualifying.
• Next, specific documentation is requested for review. Proof of Funds for down-payment and closing costs as well as Income documentation which includes Tax Returns, W2's, 1099's, paystubs, and more depending on sources of income.
• A thorough underwrite of the Assets and Income is completed by a qualified processor and/or underwriter, not just the loan originator.
• Once underwriting is complete, a "Soft-Pre-Approval" is discussed, typically over the phone (no credit pulled and no automated underwriting completed). Discussion regarding your qualifying profile, different down-payment and loan options, max purchase price and mortgage payment scenarios, estimated total funds needed to close, and so much more. 
• "Hard Pre-Approval" - when you are ready to move forward to the final pre-qualification stage in order to obtain a Pre-Approval Letter and start shopping for a new home, then at this point, it is time to run credit and run automated underwriting through Fannie Mae or Freddie Mac and achieve the Approve Eligible response needed to qualify.
• Pre-Approval Letter - Ready, set, go Shopping for a New Home! Once the Pre-Approval process is complete, a professional Pre-Approval Letter on company letterhead is provided which can be used to enter a home for viewing and presenting offers to purchase.
• Competitive Edge in the Market - having a Pre-Approval Letter gives you a huge advantage when you make an offer - shows the sellers you are prepared and serious to purchase and close the transaction.
• Offer Accepted! Congratulations, you are on your way to home ownership! Because the pre-approval process is already done, things should move quickly from this point on! Once Escrow is opened by the Listing agent, you will be required to put in your earnest money deposit into escrow, then escrow will provide the required escrow and title fees to start the loan!
• Loan Process Begins! Once fees are received from escrow, the loan process begins and includes registering your loan with the lender, getting disclosures signed, submitting your loan for underwriting, achieving Lender Loan Commitment, clearing conditions for closing, signing loan documents, funding, and recording. The really fun part is when the loan records and your realtor gets to present you with the KEYS TO YOUR NEW HOME.
• Whew, you did it! You did your due diligence up front! It paid off with a smooth and efficient loan closing, a closed Purchase transaction and the reward of home ownership!

I am here if you have questions?

Lisa Baniahmad

Broker Associate at Keller Williams VIP Properties in Valencia, CA

Call Lisa direct at 818-359-4145, feel free to email your questions at Lisab@thebanigroup.com

Please visit www.thebanigroup.com

OK! Not an easy time to buy a home, but people are doing it!

 Yes, Inflation is surging!  However, While it's not an easy time to buy a home, people are still doing it and reaping the benefits!

• It beats the alternative of renting
• Rates are still historically low
• Buying a home is still one of the best investments you can make
• Tax Benefit
• Pride of home ownership
• It's forced savings
• If you work with the right professionals; the process can be simple and efficient; taking the fear out of the transaction.

Pre-Qualified?  Do you know how much you can afford before you start shopping for a new home?  What is the max payment you can live with?  How's your credit?  

Have Questions, please call Lisa @ 818-359-4145

Have We Peaked? Can We Finally Get Back To A Sane Housing Market? Hold That Thought

 Welcome to The Bani Group Briefing. Has there been a wilder year in real estate than 2021? According to the statisticians, NO. Home owners are sitting on more equity in their homes as of Sept. 2021 than at any time in history. S&P said this week that its closely watched S&P CoreLogic Case-Shiller 20-city home price index surged 19.9% in July from a year earlier, the largest gain on records dating back to 2000.

So have we peaked? Probably not. There is still the problem of massive shortages in housing supply, and a never-ending line of buyers reaching the age where they're OVER the rental life. 

With homeowners stuck, unable to afford to move, it ripples throughout the entire housing market. Homeowners in California, Washington state and Idaho saw among the biggest average equity increases in the second quarter: $116,000 in California alone.