Can I Afford a Home?
So you are thinking about purchasing a home…And you are wondering if you can actually afford one.
Let’s talk about the market
The residential real estate market has come roaring out of the gates in 2020. Compared to this time last year, the number of buyers looking for a home is up 20%, and the number of home sales is up almost 10%, according to Showingtime.com.
Whenever home prices begin to increase, there’s an immediate concern about how that will impact buyers have to purchase a home. That thinking is understandable. We must, however, realize that price is not the only element to the affordability equation.
While home prices have risen recently, mortgage interest rates have fallen rather dramatically. At the beginning of last year, the 30-year fixed-rate mortgage stood at 4.46%. Today, that number stands over a full percentage point lower at 3.15% at a 30-year Fixed-Rate Mortgage.
How does a lower mortgage rate impact your monthly mortgage payment?
The National Association of Realtors (NAR), explained in a recent report that, even though home values have increased over the last year, the monthly cost of owning a home has decreased:
“With lower mortgage rates compared to one year ago, the payment as a percentage of income fell to 15.5%…from 17.1% a year ago.”
When purchasing a home, the price is not as important as its cost. Today, the monthly cost of purchasing the same house you could have purchased last year would be less. Or, you could purchase a more expensive home for the same monthly expense.
DON’T MAKE ANY MAJOR CREDIT PURCHASES
GET A LEGITIMATE LENDER AND GET PRE-APPROVED
AVOID FINANCIAL STRESS
BUILD A PLAN OF ACTION AND GET READY
Learn more on my BUYERS TIPS page.
Choose someone on your side!
It’s important that you choose an experienced agent who is there for you. Your agent should be actively finding you potential homes, keeping you informed of the entire process, negotiating furiously on your behalf, and answering all of your questions with competence and speed.
First, find an agent who represents you and not the seller. This is beneficial during the negotiation process. If you are working with a buyer’s agent, he or she is required not to tell the seller of your top choice. In addition, he or she is also focused on getting you the lowest asking price.
Also, when you use a buyer’s agent, you will see more properties. Not only are they plugged into their Multiple Listing Service, but also they are actively finding homes that are listed as FSBO, or homes that sellers are thinking about listing.
Know how much home you can afford
Click to use this tool and get an idea on how much home you can afford.
Whether you’ve considered becoming a homeowner for the first time or have decided to sell your home and buy one that better suits your current lifestyle, now is a great time to get together and discuss your options. CONTACT ME TODAY!
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