Saving for a House
Buying a home is a goal for many people. Whether it is your first home, your second home or your dream home, buying a home is very challenging. At Gerber Kawasaki Financial Advisors we work with you to determine the essential things you need to know in buying a home. How much you can afford, what a house is worth and lending decisions all have many financial implications. We can help you make the right decisions when it comes to what can be the largest investment of your life.
We have many years of experience helping clients prepare for buying a house including starting savings plans as well as providing financial advice through the process. We are also local to Los Angeles and have the knowledge and access to the best Real Estate professionals in the area.
Now is the time to meet with an advisor to discuss saving for a home. Speak to a Gerber Kawasaki Financial Advisor
Try our House Calculator to find out how much you will need for your home.
How much money do I need to buy a house?
In most cases, you'll need to put 20% of the purchase price down. Often, it is more difficult to get a loan when the typical buyer provides less than a 20% down payment. It is a good idea to plan for a 20% down because it puts you in better position to compete for that house. Your offer on a house may be taken more seriously when you have better credit or a larger cash down payment. Starting a savings plan for a down payment is something we specialize in at Gerber Kawasaki Financial Advisors.
How much house can I afford?
A rule of thumb is 1/3 gross income is the maximum for all monthly household costs. If you make $100,000 a year, you can afford total housing costs of $33,000 per year, or $2750 per month. This includes mortgage payment, taxes, HOA or monthly expenses and homeowners insurance. If costs exceed this, the house may be too expensive for you. This ratio is something lenders look at very closely, since it indicates your ability to make your mortgage payments. It is even better to use a 25% ratio to give yourself a little bit of room for unexpected expenses.
What is the best type of loan for me?
Finding the best loan involves many factors. There are many types of loans, depending on how long you want to lock in your interest rate, and whether you want to pay interest only or principal and interest. How long you lock your interest rate is a factor in determining your interest rate. You can typically find interest rates for 1, 3, 5, 7 or 10 years, up to the traditional 30-year mortgage. Generally, the longer the period of time that you lock in your interest rate, the higher the interest rate that you will pay. Choosing the right loan for you is an important part of the home buying process and something your Gerber Kawasaki Financial Advisor can help you with.