Financing

Home buying isn't just about looking at Laguna Beach homes and visiting pretty beachside villages. Before you get to the fun part, you have to think of financing-getting a loan, choosing a mortgage, affording the home for the next few years. Sure, it's a tedious process and you have to go through several levels of approval, but it is the most important part of home buying. By working with a LagunaOC.com agent, you can get a better understanding of home financing and make the right choice at every turn.

Different financing plans work for different home buyers, so it's important to know what you're looking for. Below are some tips on securing financing and getting the best mortgage deals.

Get Pre-Qualified

A pre-qualification is a formal statement from your lender saying that you meet their requirements for a mortgage. The process takes into account various factors, including your credit history, employment, debt, income, and current assets. Pre-qualifying allows you to better set your budget and get stronger leverage for bargaining with sellers. It also helps your agent narrow down the list to Laguna Beach homes that fit your budget.

Ask About Seller's Assistance

Seller's assistance is an optional arrangement wherein the seller counts part of the sale price-usually up to 6%-against your closing costs. The assistance is placed as part of your mortgage, so you're basically financing the closing. It allows buyers with tight budgets to better afford the closing costs, which often total several thousand dollars. Your Laguna Beach real estate agent can help you decide whether you need financial assistance and work the details into your offer.

Look up First-Time Homebuyers Programs

Most cities have public programs for first-time home buyers, which can come in handy if you're not familiar with Laguna Beach real estate. These programs usually involve a series of classes where you learn tips on home financing, get referrals to grants or support, and get practical advice on choosing a neighborhood.

Know Your Spending Capacity

How much you have on hand is not the same as how much home you can afford. Set your budget so that once all the monthly payments are made, you still have enough to live comfortably and enjoy your new home. Lenders normally use the debt-to-income ratio to see how much debt you can handle comfortably. Your mortgage payments, combined with all your other debts, should make up no more than 30% of your monthly income in order to be considered safe.