Buying a home may be the biggest financial investment decision most of us will make in a lifetime. As situations change and families evolve, the decision to buy or sell a home may arise several times in one’s life.
Timing and making the right decisions along the way can have a significant impact on your net worth and, ultimately, your peace of mind.
Buying a home can be a solid, long-term financial decision. Desirable property values in areas like Napa Valley continue to appreciate significantly in a relatively short time. Over the past twenty years, the average value appreciation of homes for sale Napa has been a whopping 125.6%. This return represents an average annual increase of 4.05%, according to neighborhoodscout.com.
For someone who bought their Napa Valley home in 2000 for $300,000, for example, their homes for sale Napa will likely be worth more than $675,000 today!
However, the decision regarding when to buy involves many personal factors.
1. Are Interest Rates Affordable?
Today’s mortgage interest rates are at an all-time low, with expectations to remain that way for the next few years. Now may be one of the best times to borrow to buy homes for sale Napa Valley.
2. Do you have a stable income?
If you are borrowing to finance your purchase, do you feel comfortable that your income will continue to remain stable in the long run? Income security is an essential factor with lenders to ensure their loans will be paid as agreed. Usually, they will ask for W-2s, 1099s, and tax returns for the prior two years to verify.
3. Is Your Debt level acceptable?
Lenders use debt-related ratios to determine whether you are already overburdened with debt. One principal indicator is a Debt-to-Income ratio or DTI. This measure is calculated by your total monthly debt divided by your monthly debt payments. Should your DTI exceed 45%, most lenders will suggest you first bring those obligations down to a more manageable level before hunting for homes for sale in Napa Valley.
4. How Much Savings Do You Have?
In many instances, lenders prefer that you put up a 20% down payment with the home purchase. However, under certain mortgage programs like FHA or VA, you can buy with a lower down payment, although you may be required to pay an additional monthly expense in Private Mortgage Insurance. (PMI).
Also, experts recommend that you maintain at least 5% of the mortgage loan value as savings after closing in case of emergency or other unforeseen expenses.
5. Is your Credit Score in Good Shape?
Generally, lenders will first look at the most accessible indicator of your worthiness, your Credit Score. A concise reflection of your payment history and current obligations, your FICO credit score should be at least 500. With FICO scores in the 500 to 600 range, you may be required to pay a higher down payment than you had hoped.
6. Other Considerations
Look ahead to make sure you can handle any upcoming major expenses or life-changing events after you buy. If you are about to have one or more children leaving for college or planning major medical procedures that require the significant out-of-pocket expense, committing to one of the homes for sale Napa Valley can be a big mistake.
Begin your Search with One of the Most Qualified Napa Real Estate Agents
Before beginning a search for any homes for sale Napa Valley, contact one of the Napa real estate agents with experience and knowledge of the area. An initial one the most -on-one consultation can reveal what exactly you are looking for, how much you can realistically afford, and provide valuable insight into the lending process and qualifications.
Adam Ghisletta has lived and worked in the area most of his life. He is a descendent of several generations of Napa Valley dairy and agricultural business owners and has a keen first-hand knowledge of properties in the region.
To learn more about homes for sale Napa Valley from one of the region’s most knowledgeable Napa real estate agents, phone Adam Ghisletta Realty at 1-(707)-363-5868.
To set up an appointment or phone call, email Adam at email@example.com or leave a message on the contact page.