How do I figure out what home I can afford in Solvang?

Asked by Halley S., New York, NY Mon Apr 23, 2007

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5
Deborah Garv…, Mortgage Broker Or Lender, San Diego, CA
Fri Jul 15, 2011
Halley, Love the Solvang area! The only way to determine how much M you have a full mortgage approval. Many lenders/loan officers will provide you a glorified prequal with automated underwriting; however, it can cause issues once you actually sign a contract because the information (such as income calculations) input into the loan processing system was not accurate. You want a full underwritten loan commitment subject only to appraisal and clear title.

I do agree with @Paul somewhat, in that I believe in providing consumers with their maximum allowable lending ability; then adjusting the loan amount to meet my clients goals and intentions. There are many things to consider in the home buying process and you want to work with a loan consultant who is going to provide knowledge and answers to all of your questions to ensure you are making decisions that reflect your goals, not only the lenders and/or the loan consultant.

I notice you hail from NY. Whether you are wanting to buy a second home in Solvang or relocating to the area has considerable impact on the financing of a property. Qualifications for financing are dramatically different when buying investment or secondary homes versus a primary residence. This belies the fact to understand that a simple mortgage "application" will not likely answer all of either your questions or those of the underwriter/lender.

Feel free to contact me is you have further questions and/or just want clarifications on the lending process. Lending is NY is far different than CA (actually simplier here and far less expensive)....yes, I have done financing in NY and all 50 states. Understanding the differences will help you throughout the process.
0 votes
Paul Claeyss…, Agent, Petaluma, CA
Fri Jul 15, 2011
THE ANSWER TO THIS QUESTION IS NOT SIMPLE. THE ANSWER TO THIS QUESTION IS DIFFERENT FOR EVERYONE. Perhaps a better question is "what do you want to afford?" Yes, the place to start is to contact a local mortgage broker, AND your bank where you do business today. They will give you different perspectives on the maximum you can qualify for. THEN, use this as a ceiling price for your purchase search plus about 10%, because you can get a discount up to 10% in today's market. NOW, consider the total monthly cost for the new home. This means thinking about the whole picture. How much of a downpayment are you WILLING to put down? Perhaps you should keep some as a reserve in case of illness, unemployment, etc. Do you have to buy furniture? If you are getting income on that downpayment money today, you will be giving up that income. Have the Mortgage Broker tell you what the total cost to close escrow will be. There will be closing costs in addition to your downpayment. Have the Mortgage Broker tell you what your your total average monthly costs will be, for the loan, taxes, insurance, impound accounts, Homeowners dues, utilities, and maintenance such as pool service, gardener, and some average repairs. Consult with a CPA to see what, if any of these monthly costs are tax deductable. The CPA can tell you about how much, if any you can reduce the amount your employer with holds from your paycheck each time, because you will have more deductions when it is time to file your taxes. NOW, think again about that maximum purchase amount the Loan Broker told you was comfortable. Work backwards from the amount you find comfortable to pay for that new (to you) housing. You may conclude that you should look in a lower price range and be satisfied wth a smaller property, or a different neighborhood, or a longer commute. THE ANSWER TO THIS QUESTION IS NOT SIMPLE. THE ANSWER TO THIS QUESTION IS DIFFERENT FOR EVERYONE.
TAKE THE TIME TO DO YOUR RESEARCH AND THINKING BEFORE YOU DECIDE TO WRITE AN OFFER ON ANYTHING. YOU WILL BE TEMPTED, BUT REMEMBER WHAT i HAVE ALWAYS SEEN TO BE TRUE: iF YOU MISS A PROPERTY YOU THOUGHT WAS PERFECT, THERE WILL BE ANOTHER ONE THAT IS PERFECT IN OTHER WAYS. IT ALL WORKS OUT FOR THE BEST IN THEN END. STILL, DON'T BE AFRAID TO MAKE OFFERS WHEN YOU SEE WHAT YOU LIKE. IF YOU DO GET ONE IN ESCROW, YOU SHOULD HAVE TWO WEEKS OR MORE TO LOOK IT OVER AND PULL OUT IF IT DOES NOT FEEL RIGHT, WITHOUT LOSING YOUR DEPOSIT. IF YOUR REALTOR CANNOT GUARANTEE THIS, GO AND FIND ANOTHER REALTOR TO MAKE YOUR OFFERS WITH.
OH, BY THE WAY, DO NOT BUY A NEW CAR BEFORE THE HOUSE! HOME LOANS ARE HARD TO GET, AND LAST A LONG TIME. CAR LOANS ARE EASY TO GET, BUT THEIR PAYMENTS CUT YOUR HOME PURCHASING POWER BY BIG, BIG BITES, AND YOU CAN'T SELL THE CAR FOR WHAT YOU PAID FOR IT IF YOU CHANGE YOUR MIND. YOU WILL BE STUCK. DON'T DO IT.
Web Reference:  http://leadingedgeprop.com
0 votes
Tni LeBlanc, Agent, Santa Maria, CA
Wed Jul 30, 2008
Hi Halley,

You should begin with a lender. Get pre-approved, not just pre-qualified so you can have some additional confidence in that number. After you are pre-approved, then start looking in that range on various sites that offer a free MLS search.

Feel free to search for local lenders on my site: http://www.mintproperties.net/financing/lenders.htm

and, you can also search for properties on my site: http://centralcoastrealestatesearch.com/
0 votes
Linda Ginex, Agent, Newport Beach, CA
Fri May 9, 2008
If this is a real question, first take Candy's advice below and then take Keith's - both spot on.
Now click on the link below and read a few of these articles every day to better understand the process. Good Luck!
0 votes
Candy Mills, , Placerville, CA
Mon Apr 23, 2007
Meet with a mortage broker and find out what you can qualify for, then shop around for the best deal.
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