Are you wondering whether you should buy this year or wait until next year? A lot of people are wondering this.
In this video I'm going to break it down for you. Lets get into it. Hi guys, I'm Alejandra Paladino your local AZ real estate agent.
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The real estate market is at a crossroads, with mortgage rates and home prices making headlines. So many people are wondering what to do. As of early September, mortgage rates are high, higher than they've been in over two decades.
Home prices are on the rise, too.
It's understandable the hesitation given these conditions. But, no matter how the market is performing, buying a house today offers some unique financial advantages. One of the most important benefits is that you can start building equity immediately. People get focused on 7 percent interest rate but what is the interest rate on rent? That is 100%Many people try to time the market but you cannot time the market, and a home should be seen as a long-term investment. The key is to focus on your long-term goals. Mortgage rates can be volatile, and many people have been saying "Marry the house and date the rate."
What that means is you should focus on finding the right home; you can always refinance later. What many of my buyers are doing to offset these rates is a temporary rate buy down. So we find a house they like and we negotiate with the seller for a credit. We use that money to do a temporary rate buy down. So if the market rate is 7%.
When we buy down rate the first year is 5% and the second year is 6%. The goal is to refinance when rates drop. This strategy is saving my clients hundreds of dollars a month on their payment. Another good option in today's market is to buy a new construction home if there are ones available in the area you are looking to buy. Right now many home builders are offering amazing incentives. They offer money towards your closing costs and some have below market interest rates. I've had buyers secure homes with a 5% interest rate.
If you are curious to learn more about the new construction home process, I'll link above my video on how to buy a new construction house. These are some ideas to help with today's market but really you need to figure out
Is Now the Right Time for You?
It depends on your unique circumstances. Here are 3 questions to consider:[Graphics showing the three questions]1- Do you have good credit?
The best mortgage deals go to those with better credit scores. A score of 740 or higher will get you the best loan terms. Lenders favor borrowers with a history of on-time payments. But don't worry there are great loan options for below 740 credit score. At a minimum you need a 620 credit score or higher. If your credit needs help improving that is also something that a good lender will provide free of charge. At least the ones that I work with as they provide amazing guidance for helping people get approved to buy their house. As it's our goal to help get you into your own house.
Have you saved enough for a down payment & closing costs?
When you buy a house you need at least 3% - 5% of the purchase price for the down payment. And you need approximately 2.25% for closing costs.
The down payment is 3.5% for FHA home buyers. When you have a higher credit score you can do a conventional loan and get away with a 3% down payment. If you're a veteran you have the option of NO down payment. Keep mind that your down payment reduces the amount you need to borrow, saving you money in interest.
Are you planning to stay in the home for a while?
The one-time transaction costs of buying a home, including closing costs, are significant. Ensure you're committed to staying in the home or financially stable enough to rent it out if you move soon after buying.[The Decision]
In the end, the decision to buy a house now or wait until 2024 is yours to make. Life doesn't wait for the perfect timing. If you meet the criteria we've discussed, are eager to become a homeowner, and are financially stable, there's no need to delay. You can start house-hunting and take a significant step toward securing your financial future.
Remember, the right time to buy a house is when it aligns with your financial goals and circumstances. If you found this information helpful, please like and subscribe for more home buying guidance. Your comments and questions are always welcome, so feel free to share your thoughts below.
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We look forward to speaking with you! Thanks for reading this blog, Moving To Arizona and we'll see you in the next video!