FAQ’s For Million Dollar Home Buyers
Without a doubt, your home is your largest investment. Those located right here within the coastal San Diego region may be investing even more based on the local market. If you’re planning on moving to the area, you should know it’s quite easy to invest over $1 million in a home. To many native SoCal residents this number isn’t unrealistic. To transplants, however, it can be a bit overwhelming.
If you’re moving to the area and are having a bit of sticker shock, don’t worry. Many newcomers find themselves in the same dilemma. Of course, it also depends on where you’re moving from. Regardless, if you find yourself having to shop for a home that’s within the seven digit numbers, you may have a few questions. Our group of real estate experts have compiled a list of the top three questions and answers for your review:
Q: What type of down payment will I need?
A: For most million-dollar loans, plan on a 20 percent down payment. For example, for a million-dollar home, you’ll need $200,000. When applying for a loan of this size, you should know that your loan amount will fall outside of the conventional conforming loan limits. Most likely, you will have what is known as a jumbo loan. These loans typically have more risk for lenders due to the large amount. Therefore, most lenders tend to ask for a minimum of 20 percent up front.
Q: What salary do I need in order to qualify for a million-dollar mortgage?
A: It really depends on several factors. Let’s say you have no debt and great credit. You could then use the standard rule of making a salary that is 1/3 of your loan amount. So, if you purchase a home valued at $1 million with 20 percent down, your loan amount would be $800,000. In this case, lenders would prefer to see an annual salary of at least $267,000. Most lenders will not exceed 28 percent of your monthly salary.
Q: How much should I plan on setting aside for maintenance and miscellaneous home expenses?
A: Each home is different based on the age, architecture and even location. In all cases, the standard suggestion for maintenance is at least 1 percent of your home’s total value. So, for a million-dollar home, you should set aside at least $10,000 per year. Keep your taxes and insurance in mind as well.
For more on this subject read our recent blog, “2016 Real Estate Recap”
Thinking of buying or selling a home in the La Jolla area? As consistent top producers in real estate, Linda Daniels and The Daniels Group are your La Jolla housing specialists. Working with The Daniels Group will give you with the advantage of having local experts to ensure that you have a successful real estate transaction. From buying, selling and investing to financing options and more, we have the expertise and resources to help you achieve your goals. Call us today at (858) 361-5561 or email us anytime by clicking here.