Common Home Buyer Questions in La Jolla, CA
Buying a home in La Jolla, CA can be a confusing experience. But it doesn’t have to be confusing – especially when you work with experienced professionals. Here is a list of common questions home buyers ask, and general advice of what you should do when buying a home in La Jolla, CA:
1. What Should I Do Before Buying a Home?
One of the first things you’ll need to do is get pre-qualified for a loan. Without a pre-qualification letter, your offers are less likely to be taken seriously. The pre-qualification process basically involves getting a credit check done by a mortgage lender or broker. This credit check will reveal your credit score and your debts and will help the loan officer determine whether you will actually qualify to buy a home. Choosing an experienced mortgage professional will help make this process easier.
Two other things you’ll want to do before buying a home are online research and saving money. Online research will help you determine neighborhood demographics and also allows you to research industry professionals. Saving some extra money is important as you’ll need not only down payment money but also moving expenses, new furniture for the new home, closing costs on the mortgage loan, and utilities.
2. How Much Home Can I Afford?
When you get pre-qualified through a mortgage lender or broker, you will be told how much home you can afford. Typically the debt ratio is 28% front end, 36% back end. What that means is the total mortgage payment (which includes principal, interest, taxes, and insurance) cannot exceed 28% of your monthly income. The total of ALL your bills including the new mortgage cannot exceed 36% of your monthly income. So if a person is making $3,000 per month, the highest housing payment they can have is 3,000 x .28 = $840 per month. That same person must be under 36% for all their bills combined so 3,000 x .36 = $1,080 per month.
There are other programs that allow for higher ratios depending on the program guidelines. FHA, for instance, is 29%/41% so you should ask your mortgage professional about all your options.
3. Why Should I Buy Instead of Rent?
The main reason you should buy instead of renting is that you are eventually able to pay off your mortgage and at that point, you will own your home free & clear with no other monthly payments required. If you are renting, you’ll never get to that point and you are constantly throwing money away each month, never building any equity in your house.
Also, the IRS gives tax breaks to homeowners that renters do not receive. So in addition to building equity, you can possibly save on your taxes. Please see a tax expert for clarification on this.
4. How Do I Choose the Best Mortgage Loan?
Your personal situation will dictate the right mortgage loan for you. If, for instance, you are planning on moving within the next 3-5 years then you may want to consider an Adjustable Rate Mortgage (ARM). If you are planning on staying in that home for 30+ years, then a fixed-rate loan is probably your best option.
5. What Should I Look for When Deciding on a Community?
Many factors go into your decision-making process when deciding on a community. In La Jolla you’ll find great school systems and shopping, along with public transportation via the Metropolitan Transit System (MTS), so if these are things that are important to you then La Jolla, CA might be a community for you.
6. How Do I Make the Right Offer on a Home?
Most home sellers price their homes slightly higher than they are willing to take, knowing that there will be some back-and-forth negotiations. Knowing this, a good starting point for an initial offer may be 5% below the asking price. In La Jolla, CA this may or may not work as home prices are in the high end and in some cases a full-price offer may not even be enough (if the property is in high demand). Working with an experienced real estate agent will help you structure the best offer on a home.
Buying a Home in La Jolla, CA
Although buying a home in La Jolla, CA can be a confusing process, as you can see there are many ways to lessen the confusion. By working with an experienced loan officer and real estate agent, you can skip some of the headaches and make the home buying process more enjoyable. To see what homes are available in La Jolla, check out our listings: