Are you gearing up to buy a Big Bear home? Now is a great time to make a move in the local real estate market. First of all, interest rates are at historic lows. Compare today’s 30-year fixed-rate average of between 3 and 4 percent to the 13 to 18 percent rates of the 1980’s. This gives buyers more purchasing power as current interest rates equate to lower monthly mortgage payments.
Additionally, homes are now at their most affordable on record. This is because home values have dropped considerably in the past few years. There is also a supply of distressed properties on the Big Bear real estate market which often sell under market value.
With all these great deals it’s easy to get carried away, but the lesson learned by millions of foreclosed homeowners is to buy within your means. Just because you’re approved for a certain loan amount doesn’t necessarily mean you should spend that much.
So, how much home can you really afford? Consider the following.
What is your monthly income?
If you have a salaried job, this can as simple to calculate as looking at your paystubs, but if you work on commission and tips, it’s important you consider both high income and low income months.
What is your monthly debt load?
Consider the monthly cost of child support, alimony, student loans, credit cards payments, car loans, and other debts that must be paid each month.
Is your job stable?
Today’s job market is still a little shaky. While the unemployment rate has improved, many still struggle to find jobs. What would happen if you were to lose your job? Would you still be able to pay your mortgage? Would you be willing to rent your Big Bear home to short, or long term tenants?
What are your monthly expenses?
This is different than your monthly debt load. These are extra expenses including: cable, internet, cell phone, gas, food, entertainment, clothes, travel, etc.
How long will you be staying put?
Homes just aren’t appreciating at the rate they used to. Although the appreciation picture is getting brighter, you will probably need to stay put for at least five years before you would break even on a sale.
If a Big Bear real estate purchase is one of your goals for 2013, it’s time to contact one of the Big Bear experts at The Tim Wood Group. We will help you determine exactly what your purchasing power is and guide you to the perfect neighborhood for your lifestyle and budget.
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