Having been in the residential real estate industry for 'a lot' of years, I often get asked the question, "Does it make sense for me to buy a home?". My answer is, consistently, 'It depends.'
Our current real estate market looks like this:
Home prices are rising, but not 'rocketing',
Interest rates are rising slowly and projected to keep rising for the foreseeable future (although they continue to be 'historically low'),
Inventory levels are moderate, making it neither a 'buyers market' nor a 'sellers market',
Most new housing being constructed in the area is priced above (or well above) $400,000,
The area is seeing a steady increase in employment opportunities, placing additional demand on available housing,
Even with the addition of hundreds of new rental units to the market, rents continue to climb,
THE BABY BOOMERS ARE HERE - retiring into the investment properties they purchased years ago.
If you are planning on being in this area for only another year or two, renting is probably your best alternative. But if you're planning on being in this area longer than that, it may make sense to buy. It really depends on your housing budget and your desire to not have to move around. Like few other places in the country, the increase in local rental costs have exceeded the increase in housing prices. We are finding that many of our clients have house payments at or near what they were paying for rent.
There is no question that, for the foreseeable future (there's that term again), those interested in purchasing a home will be paying more for it the longer they wait. But that doesn't necessarily mean that waiting is bad. Having additional money to put down will lower your mortgage payments (currently by about $5.00 a month for every additional $1,000 of mortgage.) If you're working to repair credit, that could help you secure a lower interest rate. And if you're expecting that big raise or a promotion, that could give you more flexibility on what you can afford.
Of course, monthly payment is only one of many factors. Being able to find something that you like in an area where you want to live can be a challenge. And then there is the variable of ongoing maintenance and repairs. On the other side, there is a nice deduction for mortgage interest and property taxes...and if you work out of your home, there are even more deductions available.
In today's mortgage market, there are numerous financing options. If you are a Veteran, you can buy a home with no money down. If not, there are mortgages that require as little as 3.5% down. To further encourage home buying, credit score requirements have also relaxed a bit, increasing the number of mortgage options for many people. And lest we not forget, every mortgage payment you make includes a payback on the 'principal' you borrowed, so you are building equity with every payment you make.
If you feel like buying a home is in your future, the first place to start is to contact us and we will put you in contact with an excellent Mortgage Broker. Compared to banks and credit unions, mortgage brokers work with dozens of lenders, each with their own unique underwriting requirements, interest rates, etc. They shop around for the best package for you and your unique circumstances. They will also help you determine what your financing might look like, what you can expect in terms of a TOTAL monthly payment, and how much of a house you can comfortably afford - all good things to know before you start your search.
WHAT WE DO FOR FIRST-TIME HOME BUYERS
We share your enthusiasm about buying your first home. The questions and concerns you have are very different than those who have been through the process before. To start with, you probably haven't worked with a mortgage company or home inspector before. You may not even know much about single family homes, town homes, or condos in general, other than having rented them.
We are totally hands on when it comes to coordinating activities with the seller and their representatives, the mortgage lender, title company, and all other parties involved. We walk you through and protect your interests every step of the process, from your initial discussions with a Mortgage Broker, through the inspection, at the moment you get your keys, and well beyond. You will always be up-to-date on what's happening and we're always there to answer your questions and help resolve 'opportunities' that may arise on the way to the closing table. We make sure your home buy experience is fun and exciting, the way it should be!
LET'S TALK ABOUT IT
Have questions? Think you may want to wait? Are you ready to get going? Call us! Whether you want to start the process, are looking for suggestions, or just want to kick ideas around, we are here for you! 561-371-7550