Making a home purchase is a major decision and should be weigh carefully and is not for everyone. My humble opinion is if you have a steady job, good credit and the down payment, then you are being offered a gift of a life time. With the low interest rate hovering from 5-5 1/2% and prices at or close to the bottom it is a win win situation whether you are buying your first home or looking to move your family to a bigger home.
If you are one of the many people who are on the fence because you fear the prices might still go down, consider this:
If you buy a home worth $600,000 with a $480,000 30-year loan at 5% interest rate, your monthly principal and interest would be $2,576.74. If rates rise to 6.50% your payment increases to $3,033.93.
Now if there is a 5% decrease in price and your $600,000 home falls to $570,000 in one year but you wait to buy and the interest rate rises to 6.50% your payment will be $2,882.23 at 20% down payment. Now you'll spend more money per month plus at a higher rate you pay more interest over the life of the loan. How long you plan to stay in the home must also be taken into consideration.
One thing is certain, the FED cannot keep the interest rate this low forever. (As the economy becomes more stable interest WILL rise to hedge inflation.)
The Oscar Bautista Group specializes in helping families make good decisions. If you are considering purchasing a home and would like a FREE consultation, we'd love to sit down with you and help you weigh your options and direct you to a qualified, caring mortgage professional that will help you with the numbers. You can contact us at 415-370-7703 or e-mail oscar@oscarbautista.com .
Market conditions play a huge part in any decision about when to buy a home. And if you have been thinking of buying a home, this is the time. Prices are low and mortgage rates are low.
When do you know you're ready to buy a home?
. You have a steady source of income. You've been employed on a regular basis for the last 2-3 years and your current income is reliable.
. You have a good record of paying your bills.
. You have money saved for down payment.
. You have ability to pay a mortgage every month, plus additional costs (taxes, insurance, etc.)
What to do first?
Here are some of the few things to do before you start looking for a house.
. Talk to a mortgage broker to get loan pre-approved.
. Talk to a real estate agent - a good agent can recommend reputable brokers and help you make sense of the terms of the loan.
. Review your credit report and scores with mortgage broker to determine if any repairs are needed.
. Select a community that will allow you to best live your daily life.
Owning a home has many benefits. When you make a mortgage payment, you are building equity. And that's an investment. Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities- like insurance, real estate taxes, and upkeep- which can be substantial.
If you need more information, please call Oscar Bautista at 415-370-7703 or Lina at 415-420-5352.
I invest 100% of my time delivering first class service to my customers. I am interested in building a strong, lasting, lifelong relationships, one person at a time.
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
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