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Health & Fitness

What Is The 'FACTOR?'

How much will my monthly payment be? Here's a quick calculator you can do in your head.

What is the 'FACTOR?'

You might need to know if you are shopping for a home. It is simply a number based on the current interest rate that you will pay for each $1,000 you borrow. At today’s great interest rates, the factor on a typical 80 percent Loan-To-Value loan is $5/month
or less. On a $10,000 loanm your payment will be $50 per month.

This is a handy number when comparing cities. My son and I are Realtors specializing in Laguna Niguel. Our great city is a wonderful place to live and own property for many reasons. Two BIG reasons are our 1 percent property tax rate and NO Mello-Roos bonds. (Not to mention the great weather,, , beaches, etc.). If you look at homes in Aliso Viejo, Ladera Ranch or other newer areas, you may see taxes and bonds that push your overall tax rate significantly higher.

Find out what's happening in Laguna Niguel-Dana Pointwith free, real-time updates from Patch.

Here's an example: if a neighboring city has a tax rate two tenths of a percent higher
than  Laguna Niguel, and Mello-Roos bonds totaling $2,000 per year, the extra burden approaches $3,000 per year, or $250 per month, on a $600,000 home. Divide $250 by our FACTOR of 5 and you will see that the purchasing power of that money is around $50,000. Your purchasing power just increased by that amount if you buy a home in
Laguna Niguel.

Therefore, when you get your “Good Faith Estimate” from your lender (and your prequal
letter), be sure to ask what tax rate and HOA amount was considered in their estimates. Laguna Niguel is a wonderful place to live!

Find out what's happening in Laguna Niguel-Dana Pointwith free, real-time updates from Patch.

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