Hurry! Save money and buy a NEW HOME while interest rates are low
Homebuyers understandably approach purchasing their first home with caution, but it’s important not to wait too long. Given the current conditions of the housing market and the likelihood of prices going up in the near future, the best time to buy a home is right now.
Home interest rates today are still 4 percent, which are the lowest they’ve been in years. Interest rates significantly impact both the short-term and long-term costs of buying a house. Low interest rates are good for homebuyers because they increase your buying power, broaden your housing options and make it easier to acquire certain types of loans. When interest rates are high, your buying power diminishes, and you may find yourself settling for a lesser home, or waiting to buy in the hope that interest rates will drop in the future. Interest rates are low, but they won’t stay that way forever, so it’s important to strike while the iron is hot.
Interest rates rise and fall all the time, but the overall trend in interest rates over the past 10 years has been downward, according to Mortgage-X, an independent information service. Interest rates reached an all-time low in 2013, but are showing signs of climbing again, which means you can expect rates to rise within the next year or two. When interest rates rise, they usually do so quickly and dramatically—often making significant jumps within a week—but when they drop, they fall gradually over the course of months and years. The upshot of this is that it’s unlikely we will see interest rates at the current low level any time soon. Home costs are also on the rise, and the current combination of low interest rates and increasing home prices means that houses are more affordable now than they are likely to be for quite some time.
Example: Mortgage Amount: $150,000 APR: 4% Principal & Interest: $716
Mortgage Amount: $150,000 APR: 5% Principal & Interest: $805
Mortgage Amount: $150,000 APR: 6% Principal & Interest: $899
Taking the next step
Buying a house is a big step, and home interest rates today are making it possible for more and more families to find an affordable home. One of the most important decisions ahead of you is the choice between a new home and a resale. New homes have quite a few advantages, including more modern layouts and better amenities. While they often have a somewhat higher price tag than old homes, they make up for it in energy-efficient design and brand-new appliances that aren’t likely to need costly repairs any time soon.
Low home interest rates today make it possible to get more bang for your buck when you purchase a new home. Some of the steps you’ll need to take as you get ready to buy include obtaining your credit information and making sure it is accurate and up to date, gathering key employment documents, determining how much you afford—this is likely to change depending on the current interest rate—and finding a home lender you can trust. Many home builders are able to offer a wide variety of financing options for qualified buyers, making the new home-buying process simpler than the alternative of obtaining loans to purchase and potentially renovate an older home.
Today’s homebuyers have a lot of factors working their favor, but nothing lasts forever. As home prices increase and interest rates inevitably begin to do the same, tomorrow’s homebuyers may have to settle for lesser homes in lesser neighborhoods.
For More Information Call Tammy Boudreau 251-709-6119