With real estate prices going up steadily each year, Los Angeles is a difficult place to buy a home no matter what your income or budget. For those who don’t believe that they can afford to buy real estate, however, take a moment and consider the following options. You might find that owning a home might be more attainable than you imagined.
Getting Down with the House Down Payment to (afford a House In Los Angeles)
So you’re interested in buying a home in LA but you’re not sure if you can afford it. Here’s a breakdown of what you need to know in order to make an informed decision.
What Kind of Houses Can I Afford in Los Angeles?
There’s no definitive answer to this question since it depends on a variety of factors including your income, debts, and credit score. However, a good rule of thumb is to aim to spend no more than 28% of your monthly income on housing costs.
In order to get a more specific estimate of what you can afford, you can use a home affordability calculator. These calculators take into account your income, debts, and other factors to give you a more accurate estimate.
What Are the Housing Costs in Los Angeles?
The average monthly rent for a one-bedroom apartment in LA is $1,895, while the average monthly mortgage payment for a home in LA is $2,732. Keep in mind that these are just averages, and your actual costs may be higher or lower depending on the size and location of the home you choose.
Types of loans/mortgages to be aware of
The factors in purchasing a home are often related to the type of loan or mortgage and amount of down payment that you will need. Qualifying for a loan is a different story, but understanding the types of loans out there can expand your options for buying a home. While some down payments can be over 20% of a home’s value, you can get down payment assistance and bring down your upfront costs. This maze of numbers is easy to navigate if you have a mortgage broker to guide you.
Generally speaking, each person’s financial state is a personal and unique situation that should be examined on a case by case basis. However, achieving home ownership is partially about your personal attitude.
What does it take to become a homeowner?
If you have the intention to buy a home simply for the virtue of having one, then this can vary how your results will be driven. Is being a homeowner a reasonable goal? Answer this first. Then, you’ll know realistically what your timeline is and what extra steps may be necessary for you.
However, if you have very clear intentions for the home and an image of what it needs to look like, your loan and mortgage pursuits will have higher variability. This will depend on number of bedrooms, location, sense of surroundings, etc. Several key factors go into what forces the market to rise and fall. In part, timing becomes a major factor to contribute to this.
Be aware of the time you are jumping onto the homeowner scene. If you are not as financially stable as you were two years ago, or are even more financially stable, compare it to the market and what you were thinking at the time then. This will give you a better indicator of where you stand.
Are you planning to build a family, or do you already have one?
Becoming a homeowner isn’t something you do overnight or with little research prior. Prepare ahead of time what your plan is for the home in terms of family expectations. If you already have children that are in their youth stage, moving is always a major shift for them. Also, if they are in the later stages of their schooling, they’ll be more object to change. Consider their expectations and feelings as well prior to moving.
However, also consider the availability of the market. If there’s a particular home you are excited about and want to pull the trigger on, don’t waste it. This also brings us back to financial security.
The most financially secure person might not feel ready to purchase real estate due to inner anxieties, despite their extensive savings. Don’t make the leap if you’re not comfortable, since it is a big commitment.
If you are ready, though, and want to explore your options, Eagles Mortgage Company, Inc. can help you assess your finances and find the perfect loan or mortgage plan for your dream home.