HOME AFFORDABILITY
The hot topic of this year when it comes to the housing market has certainly been mortgage interest rates. Youve heard both sides: people having a 2.75% rate on their homes and how they will never leave. Then you also hear from older generations that they bought a house at 16% and thought it was fine. Historically, rates being between 5-7% is NORMAL. However, with housing pricing the way they are, that monthly payment can be a lot.
If you're trying to time the market right now, its going to be difficult. While rates have been hovering in the upper 6s this summer of 2023, when those go down (possibly end of the year into next), the demand will go back up again and so will home prices. So if you can qualify, why not buy a house at a lower price and refinance later? The saying weve been using here (which is so appropriate): DATE THE RATE. MARRY THE HOUSE. The rate is temporary. The price of the house is permanent. You dont even have to buy the rate down initially. Most lenders will actually credit you for not buying the rate down, which will bring down the money you need for closing. Save the money (usually a couple thousand dollars) to refinance later because that typically will be far worth more. Some lenders will even refinance at no or low cost too.
But here's the thing. Almost anyone you will talk to will tell you that buying their first house was nerve wracking. Doesn't matter the cost, the rate, the terms. Its a major decision that comes with responsibility. But then what people also say shortly after being in the home, they couldn't more happy in that decision. When they go to sell a few years later, they're even more happy with the equity they walk away with to put towards another home.
Here are a few ways you can help with affordability:
--If you're a veteran, use a VA loan with 0% down
--Looks up grants to help with down payment. Bank of America has some that will give you up to $17,500 towards your down payment and closing costs that you do NOT have to pay back. There are a few qualifications but overall very easy, and you can also bring additional money if you'd like. Let us know so we can get you in touch with a loan officer there.
--Get a credit from the seller to help with closing costs, down payment, rate buy down, repairs, etc. Do that now when the competition is slightly lower. When competition goes up when rates go down, that wont be something most sellers will do as they will have the upper hand.
--Register for a down payment fund for your wedding registry. HomeFundIt is a great program and we can help connect you with trusted lenders who have this product.
--Buy a home with Home Partners of America. Its a lease-with-an-option-to-buy program where, in a nutshell, you go look for a home like youre buying it. Then HP buys the home, leases it to you for up to 5 years. Each year, you can buy the home from them at a SET price you agreed to before they bought the house. This gives you time to save, fix credit, etc. Let us know if youre interested and well send you an invite to apply.
--See if you can qualify for an ARM, aka Adjust Rate Mortgage. 5-7 years ARMs have had more competitive rates. After the term of 5-7 years, the rate does go up; but they key here is that rates are expected to go down in the next year or 2, so you're well in the clear of that.
At Collective Home Group, we believe people should be empowered and prepared when making their biggest life decisions. So please reach out with any questions. Were happy to be a sounding board, get you the resources you need, help create a plan, and then execute that plan. Have a wonderful day!
Cassie Roberts // 720.261.8379
Tricia Metcalf // 720.469.4808
REALTORS ® // Collective Home Group at Madison & Co. Properties
www.collectivehomeproperties.com
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