Mortgage Loans

Housing Affordability in San Diego CA

2006-02-11T08:05:00.000-08:00

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Housing Affordability

The percentage of households able to afford a median- priced home in the San Diego area stood at 9 percent in December, compared to 14 percent statewide.

The San Diego region's housing affordability index went up one percentage point from November, but was down two points from November 2004, the California Association of Realtors said Thursday.

The median price of a home in the San Diego area was $603,680 in December, down from $616,840 in November, but up from $577,040 in the year-ago period.

In neighboring Orange County, 10 percent of households could afford a median-priced home, compared to 11 percent last month and 13 percent during the same month last year.

The median home in that county fetched $702,290 in December, compared to $695,500 in November and $627,000 a year ago.

The statewide HAI of 14 percent was down from 19 percent for the same period a year ago, according to CAR's report.

California's median home price was down slightly to $548,430 in December, compared to $548,680 last month, but up from $474,270 a year ago.

The HAI for all of the United States stood at 49 percent, up a point from November and six points from the same period a year ago.

The Los Angeles-based association calls its monthly housing affordability index the most fundamental measure of housing well-being in the state.

The minimum household income needed to purchase a median-priced home at $548,430 in California in December was $134,200, based on an average effective mortgage interest rate of 6.33 percent and assuming a 20 percent downpayment.

How Lenders Determine Your Maximum Mortgage Amount

2006-01-18T11:36:00.000-08:00

To find out your maximum mortgage amount, mortgage lenders use what is called debt-to-income ratios. This ratio is simply the percentage of your monthly gross income (before taxes) that is used to pay your monthly debts. Because there are two calculations, there is a "front" ratio and a "back" ratio and they are generally written in the following format: 33/38.

The front ratio is the percentage of your monthly gross income (before taxes) that is used to pay your housing costs, including principal, interest, taxes, insurance, mortgage insurance (when applicable) and homeowners association fees (when applicable). The back ratio is the same thing, only it also includes your monthly consumer debt. Consumer debt can be car payments, credit card debt, installment loans, and similar related expenses. By the way... Auto or life insurance is not considered a debt.

A common guideline for debt-to-income ratios is 33/38. A borrower's housing costs consume thirty-three percent of their monthly income. Add their monthly consumer debt to the housing costs, and it should take no more than thirty-eight percent of their monthly income to meet those obligations.

The guidelines are just guidelines and they are flexible. If you make a small down payment, the guidelines are more rigid. If you have marginal credit, the guidelines are more rigid. If you make a larger down payment or have sterling credit, the guidelines are less rigid. The guidelines also vary according to loan program. FHA guidelines state that a 29/41 qualifying ratio is acceptable. VA guidelines do not have a front ratio at all, but the guideline for the back ratio is 41.

Example: If you make $5000 a month, with 33/38 qualifying ratio guidelines, your maximum monthly housing cost should be around $1650. Including your consumer debt, your monthly housing and credit expenditures should be around $1900 as a maximum.

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Cal Mortgage Quotes

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Forgot to include an image of my Cal Mortgage quote website. If you are in the California area and need a home loan, please feel free to contact us.

California Mortgage

2006-01-18T11:19:00.000-08:00

I also have a new site called California Mortgage that also provides CA mortgage quotes to California locals.

#1 Source for California Mortgage Quotes

2006-01-18T10:59:00.000-08:00

Quoting Loans is the #1 source for California mortgage loans as well as mortgage quotes from around the country. Although we specialize in California mortgage loans, such as jumbo interest only home loans, debt consolidation loans, refinancing, etc, in California, we also serve clients from around the U.S. Please use the form on our homepage for a consultation. No credit checks or SSN required for home loan quote.

Welcome to The Mortgage Loan Quote Blog!

2006-01-18T10:47:00.000-08:00

Welcome to The Mortgage Loan Quote Blog!

I am the owner of Quoting Loans mortgage quote website. I have a network of lenders from California to Maine ready to quote you the lowest rate on a home mortgage loan. If you are in need of home financing or refinancing, give our site a visit at www.QuotingLoans.com