Financing is Favorable...For Now

Some buyers are concerned about buying a home that will drop in value in the coming months. But buying a home is a long-term investment, and there’s more to consider than just the purchase price. From 1980 to today the 30-year fixed rate mortgage has ranged from more than 18 percent to less than 5%.

 

If you’re waiting for home prices to come down another $10,000, you may pay more in the long run if mortgage rates rise in the meantime. For example, look at the below chart. You’ll see that even with a higher loan amount at a 5% interest rate, the monthly payment is $50/month lower verses a lower loan amount at a 6% interest rate. Also, the amount of interest paid during the total life of the loan is almost $30,000!! So, waiting for prices to come down is very risky.

 

Loan	Rate	Payment	Total Int
$270,000	5.00%	$1,449	$251,791
Loan	Rate	Payment	Total Int
$250,000	6.00%	$1,499	$289,595

When you are looking for a bargain, don’t lose sight of the big picture. If you try to time the market to save a few thousand on the price of a home, you could end up with a higher monthly payment and total overall cost of home ownership.

 

 

 

The Importance of a Home Inspection

Should you get a home inspection when selling or buying? Watch this 5 minute video for important information on the value of a home inspection…

https://www.thinkbigworksmall.com/public/showArchiveVideo/3909/4116

 

 

 

Will a Seller Pay my Closing Costs?

“Will a seller pay my closing costs?” is a question we are asked frequently. It depends on two main items:

1) Type of loan you are pre-approved for

2) Situation with the property

 

Credits for closing costs can be anywhere from 3%-6%. On a $300,000 loan that can be anywhere from $10,000-$18,000. Typically for conventional loans the lender will allow the seller to credit you back 6% of the purchase price towards your closing costs. For FHA loans, it is a maximum of 3%.

 

It also depends on the situation with the property. For example, if there are multiple offers and/or you are going in under the asking price, then chances are the seller is not going to accept your offer if you also ask for closing costs to be paid. However, if you are the only interested party and the home has been on the market for several months the seller may agree to pay all or part of your closing costs. It is important to have us or the Realtor you are using find out the maximum credit allowed by your lender and understand the seller’s situation. We work with our clients to get them credits towards their closing costs whenever possible. The more money you save and the overall lower price you get for your home, the happier you will be.

 

 

 

 

What should I list my house at?

Rule number one in the current market is NOT to start out overpricing your home just to “see what happens”—you will only reach 10% of the buyers. Buyers are shopping price. They want a good deal.

 

For example, if you list your house 15% over market value than you are attracting only 10% of the buyers. If you ask 10% above market value you open it up to 30% of the pool of buyers.

 

Pricing it at market value in this market still only attracts 60% of the buyers. It is not until you begin to price it under market value that you will see higher activity and traffic through your property. 10% under market value typically yields interest from 75% of the buyers out there and 15% under market value widens your target market of buyers to 90%!!!

 

So, what should you list your house at?....Obtain the current market value from your Realtor, then price it at least 10% under that value to receive an offer faster and possibly multiple offers. You can create competition at the right price. Good luck!!