If you talk with your friends and family members it’s not hard to find at least one person who is thinking about buying a home in Orange County, but the sad reality about home buying is that many people are not prepared and don’t know what to expect.
Thankfully home buying can be an easy process when any homebuyer asks themselves these simple questions.
How Big Of A Home Can I Afford?
This can be considered the most important question of the home buying process because, thousands of homebuyers make the mistake every year of buying a home that they can’t afford and they ultimately end up not being able to pay their mortgages.
To find out how big of a home they can afford all an aspiring homebuyer can use our helpful Home Mortgage Calculator.
A typical mortgage calculator will help the future home buyer to find out how much home they can afford based on their income, current interest rate and length of the mortgage loan (example: 15 year or 30 year mortgage loan) that they are considering.
What Is My Debt To Income Ratio?
For those readers who are not familiar with the term debt to income ratio, this means how much income you have coming in and what percentage of that income is being spent towards paying off your debt.
Anyone who has a debt to income ratio that’s greater than 35 percent should work on paying off some of their debts first before applying for a mortgage loan. A high debt-to-income ratio almost always results in a disqualification when applying for a mortgage loan.
Do I have A Good Credit Score?
Credit scores are important and a thing that everyone should check at least once every six months, because low credit score means that a potential home buyer might not get pre-approved for a mortgage loan.
If someone who has a low credit score does get pre-approved for a mortgage loan they will ultimately pay a higher interest rate, compared to having a higher credit score, which means a better chance of approval and a great interest rate for a mortgage loan.
To learn more about how to prepare for buying a home, contact the team of Top Orange County Realtors at Fred Sed & Associates today by calling (949) 272-0125.