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RENTING vs. BUYING

Renting

If you are currently renting, you are probably asking yourself every year, should I renew my lease, find another rental, or purchase a home? It helps to understand the true costs of renting vs buying to determine the best decision for you moving forward.

In the past year, both current renters and new renters coming into the market have seen rents go up substantially accordingly to information noted from Realtor.com. In fact, three out of four renters who have moved in the past 12 months reported their rent had increased. This speaks to renters renewing their leases as well as new renters coming into the market. And if you look back at historical data, according to the US Census Bureau rents have been rising consistently since 1988.

So, if you’re considering renting as an option in 2023, it’s worth weighing whether this trend is likely to continue. To sum it up/simplify it if you will … if trends continue as they have year after year, you can pretty much bank on the fact that rents will continue to rise. 

Homeownership = EquityValue

These rising costs we are seeing today may just make you reconsider what other alternatives you may have. If you’re looking for more stability, it could be time to make homeownership your goal. One of the many benefits of owning your own home is it provides a stable monthly cost that you can lock in for the duration of your loan. As Freddie Mac says – 4 Benefits for Owning a Home

“Monthly rent payments may increase over time, but a fixed-rate mortgage will ensure that you’re paying the same amount each month. With a fixed-rate mortgage, your interest rate is locked in for the life of loan. Steady payments allow you to budget wisely and make plans for the future.” 

aIf you’re planning to make a move this year, locking in your monthly housing costs for the duration of your loan can be a major benefit. There’s no need to wonder if you will need to adjust your budget to account for any annual rent increases from the landlord. When you are renting, you are building the landlords equity, NOT your own. As a homeowner you are building your own wealth – HUGE benefit! Let me repeat … as a renter you are building your landlords wealth … plain and simple! In fact, the latest Homeowner Equity Insight report from CoreLogic shows the average homeowner gained $34,300 in equity over the last 12 months. With that in mind, as a renter your rent payment only covers the cost for you to live in residence. Whereas when you pay the mortgage on your home, you grow wealth through forced savings that ultimately builds wealth through the equity in your home. 

If homeownership is your goal for 2023 – reach out to me, I would be happy to connect you with one of my recommended mortgage lenders to discuss the possibility, give you the information you need to help you get the process started, get pre-approved and on your way to your journey towards homeownership!

Laura

The Key To Your Real Estate Success

Helping buyers and sellers achieve their real estate goals

WHAT’S ON TAP FOR YOU IN 2023

A new year brings new opportunities! Could a move be just up on the horizon for you? If you are pondering that idea of “making a move” there are many things to consider – but one of the first things to take into consideration is your “Why?” Once that is established, everything else will fall into place as it should. We all can agree that there are many emotions that take place when thinking about buying or selling a home, never mind the emotions that come along when one actually goes through the process of buying or selling. I urge you to stay focused on your “Why” – and set your sights on the goal! 

Here are just a few key things sellers should keep in mind once the decision has been made to sell their home … 

Price Your Home Right

As we come out of 2022 and make our way into 2023, we can all very much agree that the housing market shifted as mortgage rates rose … forcing some buyers to go into “wait and see” mode. As a seller, you’ll need to come to terms that the market is not as they were back in 2020-2022 and setting that expectation for yourself and pricing your home appropriately based on where the market is today will be key in getting your home sold for the best value possible. Homes that don’t have any major objections and are priced well should sell quickly. Inventory is still at an all-time low in our area, which is a good thing for the sellers if you’re in the market. Supply & demand is and will always be one of the driving forces in home value, but still and all based upon other factors, such as inflation, mortgage rates, etc., experts say, we won’t see home values rise to levels that we had seen over the last 2 years – which was in the craze of the market … but moreover should hover in/around where they are, but I guess this too will remain to be seen. What I do know is pricing your home correctly is key to getting your home sold for the most value with the most suitable terms. If you price your house too high, you are not going to reach the right buyer, giving them the opportunity to make an offer on your home. If you price your home too low, you are taking the risk of leaving money on the table. As an experienced real estate professional, I can help determine what your ideal asking price should be. 

Keep Your Emotions in Check

Today, homeowners are living in their homes much longer than they have in years past. According to the National Association of Realtors (NAR), the average time a homeowner have owned their home has increased from 5 to 10 years. With that in mind, it’s only natural that you become more attached to your home and find “the move” even that much more difficult. It may be that it was the first home you bought or the house where your loved ones grew up, a memorable celebration took place … you get the idea! Every room has memory, and it’s hard to detach from the sentimental value. Remember, stay focused on your “why” and set your sights on the goal! 

Stage Your Home

While you may love your decor and how you’ve customized your home through the years, understand that not all buyers will feel the same way, so neutralizing your design where possible could help appeal to a larger buyer pool. Make sure you focus on your home’s first impression, which in essence is their “first showing”. As NAR says “Staging is the art of preparing a home to appeal to the greatest number of potential buyers in your market. Allow the buyers to envision themselves in the space so it truly feels like it is a place that they can call home! 

In case you missed it, here is the 2022 Year in Review Market Watch. Lot’s of good market info and insights! 

Laura

The Key To Your Real Estate Success

Helping Buyers and Sellers Achieve Their Real Estate Goals 

THERE’S NO PLACE LIKE HOME

While the financial benefit of owning your own home is one to plan and strive for when looking at it from a financial standpoint, just think for a moment about the emotional aspect of homeownership … that value is priceless!   Whether you are a first-time homebuyer, move-up buyer, or you are a buyer looking to downsize, or perhaps you are thinking about your up-coming retirement.   All these scenarios are “new chapters” in life, and all should be celebrated!  

Home can mean something different for each one of us, but the emotional aspect is relative to all.  Think about it … you have been living home with Mom & Dad, trying to save enough money to purchase your very own home, or perhaps you’re a newly married couple living in an apartment, saving what money you can to purchase your very first home together, or maybe your company just offered you the option to work remote, which is great and still popular these days –  but your current home lacks the space needed to work efficiently, or perhaps you are an investor looking to purchase a few properties as an investment for the future – which comes with its own set of emotions – which is another topic for another day.  Whatever the case may be, “Home” will mean something different for each of us … whether a first-time homebuyer, move-up buyer, or a buyer looking to downsize for whatever your reasons … finding that home that will allow you to live your comfortable lifestyle that will work for you and your family … and then calling that house “Your Home,” is priceless!!  Even as an investor, if you are of that certain mindset, and have the capacity to do so – building wealth through real estate is said by many to be the way to go these days … and one still to be celebrated.

First time home buyer – Buying a home is a major milestone in one’s life.  One to be proud of and one to be celebrated. Set your goals, then educate yourself on how to attain them.  Speak to the key people you need to, so they can assist in making that goal your reality. 

Move-up buyer – Your family is growing, and space is getting a little tight.  You’ve been saving all you can in preparation for that day when you can purchase that bigger home, giving everyone that additional space desired to enjoy a happier more comfortable family lifestyle.   Perhaps you are coming from a condo – and now your goal is to purchase a single-family home where the outdoor space is welcomed.  For these reasons, you may be asking yourself, is now the right time to purchase a home with all the goings-on in the world today?   My answer … there is no right or wrong time, it is when the time is right for you.  My advice for you would be speak to a real estate professional to discuss your individual wants and needs.  Then have a market analysis done to determine what your home’s true market value is in today’s market.  Having this information will be helpful in making the decisions that will best work for you.  Depending on when you purchased the home, you may be pleasantly surprised on the amount of equity you hold in your current home.  The equity gained could allow you to purchase that bigger home while keeping within your current budget, all while gaining a more comfortable lifestyle.

Down-sizing buyer – Whether it just makes sense to live in a smaller home … perhaps the kids are grown and flew the coop or, retirement is just around the corner.  This is a chapter many make their plans around and look forward to them as that day finally arrives.  You have worked long and hard through the years, and this chapter is one to be celebrated.  But is now the time to make that move, you ask?  As I had suggested earlier as being a move-up buyer for example, same advice would hold true for a buyer who is looking to down-size.  Knowing the value of your home in today’s market will be a key factor in making your plans.  If you owned your home for a long time, you may be pleasantly surprised of what equity you hold in your home that may just allow you to purchase a smaller home outright if the equity is there.  Speak to a real estate professional to help determine what your true market value is in today’s market, which will help give you some perspective when making these decisions.

Having said all that, purchasing a home may very well just be one of the biggest financial decisions you will make in life – it is also one of the most emotional decisions you will make in life as well.  It is the goal for so many, to one day find that special place that truly makes us feel like “There is no place like home”  … because that is where it all begins!  A place to call HOME allows us to live and grow … to create lasting memories with those we love … all to be cherished for years to come.  

Laura

The Key To Your Real Estate Success

Helping sellers and buyers achieve their real estate goals

MY WISH FOR YOU THIS HOLIDAY SEASON

My wish for you this Holiday Season would be for you to receive the gift of TIME! In today’s world, many of us are guilty in getting caught up in our busy lives that we do not take enough time to share life with the ones we love. Now especially, with the Holiday Season upon us, we have so much more to do, we forget about what’s most important!

Let us not forget that life is too short and that we can’t take back those days of “would have and should have.” Let us remember to live in the moment…. because as we all know, these moments are much too precious to let go by!

So, if there are no other gifts you give this holiday season …. give the gift of TIME, to you and to those you love… sharing good times with your family and friends… for this is a priceless gift that will live in your heart and the hearts of others forever!

Wishing you all Happy Holidays

and a very

Happy and New Year!

Laura

WINTER HOME MAINTENANCE CHECKLIST

Getting Ready For Winter Storms

Before we wrap ourselves up in the holiday craze and cheer of shopping, entertaining, spending time with family & friends, special events, etc.… let’s take a few moments to go through your winter weather checklist to make sure you have yourself covered when the really cold weather sets in, and for the snow that is surely just around the corner.

Here are just a few things to consider …

Let’s first start off by checking the condition of your snow shovels, gloves, and window scrapers, and replace as needed. If you own your own snowplow, have it serviced, so you know you are ready to go, and of course make sure you have any oils/additives and gas stored in a safe place ensuring your readiness should the need arise. Storing some of your winter weather supplies such as shovels, near the door where you can access them easily in a storm. Mark the sides of your driveway and other key places with reflective poles, to help the snowplow service provider see where the driveway begins and ends – and mark any other key areas that you deem important. Keeping your pantry stocked with food, bottled water, candles, batteries, and flashlights in case of power outages is always a good idea.

Insulate Your Pipes

Your water pipes are not strong enough to withstand the transition from liquid water to ice. Water expands when it freezes with tremendous force that can overpower your pipes. To prevent this from happening, insulate the pipes in vulnerable areas like unfinished basements or pipes closest to the exterior walls. This foam insulation is extremely inexpensive but could save you thousands of dollars should any of your pipes freeze.

It is also important to drain your outdoor water spickets now, if you haven’t done so already (turn them on for a minute to drain any left-over water left in the pipes.). Once drained, shut it off and shut down the main shut-off lever for the winter so it will be ready and intact for the spring season.

Change Furnace Filters

This could save you a fortune on your furnace and utility bill, and it will also improve the efficiency of your heating system. Changing the filter is easy, cost-effective, and only needs to be done once or twice a year.

Sweep and Inspect the Chimney

When too much ash, embers, leaves, and other materials clog your fireplace, it poses a risk of chimney fires. It could also prevent smoke from exiting the chimney, meaning that it will only enter your home. You should have your chimney swept once a year to prevent this from happening.

Check Your Roof & Clean Gutters

Hiring someone to check your roof and clean your gutters is a good proactive practice that could lead to a big expense if left undone. If you are able and handy, this certainly is a good do-it-yourself project.

Rotate Ceiling Fans

TIP! Heat naturally rises toward the ceiling … so during the winter, if your ceiling fans rotate backward – flip that switch … it will gently push cool air upwards, forcing the heated air back down to the floor. This is an especially helpful tip if you have high ceilings.

Check Your Heating System

Maintenance is key to longevity for any system! Make sure that your heating system is running at optimal levels. If you don’t have a heating system service contract with your service provider, you may want to think about doing that. Have your system serviced and cleaned annually – ideally before the winter temperatures set in. The last thing you want, is to have your heating system give you a problem/stops working right in the middle of freezing temps.

Seal Air Leaks

Seal cracks around doors and windows and add weather stripping where needed. Having a professional do this will yield you the best results. Otherwise, if you are handy … not such a difficult task. With energy costs going up, up up … this task will help lower your energy bills and will also keep your house warmer in the event of a power outage.

Check/Change Your Detectors Annually

Smoke and carbon monoxide detectors are important all year round, especially during the cold winter months. Rule of thumb … replace your smoke and carbon monoxide detector batteries at least once a year, some suggest every 6 months, try to be consistent in your practice. Not fun to be woken up in the middle of the night to the sound of a chirping detector, letting you know it needs a new battery.

Drain The Fuel From Your Small Gas-Powered Engines

Again, maintenance is key … Gasoline doesn’t last forever, it decomposes quickly, which causes the engine to “gunk-up” – and may cause the engine to fail/inability for it to start again come spring when you need it. Look at your small equipment’s owner’s manual for best practices to keep your equipment in good working order so it will last for many years to come.

Check Exterior Landscape

Take a walk around the exterior of your property and look for any broken branches or dying trees that are in close proximity to your home, car, fence, or other valuable property. Intense winds could take out a dying tree with ease, so if you see something, either cut it yourself (if it’s an easy fix) or call in the professionals.

HOW TO PREP FOR POWER OUTAGES

  • Have warm clothes and blankets on hand.
  • Stock Up On Supplies – Having a wide variety of non-perishable food items, drinking water, and first aid supplies on hand can make the uncomfortable “power outage” scenario a little safer and more tolerable.
  • Update your emergency kit. – Be prepared for power outages and other emergencies by making sure your house and car are outfitted with well-stocked emergency kits. The basics include bottled water, a flashlight with extra batteries, a cell phone charger (battery-powered is best), car charges, food, blankets and a first-aid kit. At home, keep essential documents in one easily accessible place.

Note: If you are anticipating a storm and a possible power outage – ensure all devices, and phones have a full charge before the storm hits.

Use Your Fireplace, Wood or Pellet Stove

Of course, if you have a fireplace or wood stove, you are golden. That’s assuming you have your firewood in an easily accessible location. If you’re like me, I have a pellet stove which works great when you have electricity … but having your pellet stove hooked-up to a generator, and bags of pellets on hand which I do – will keep your home warm and toasty in the event of a power outage. It’s all about thinking ahead and being prepared.

Get a Generator

Lastly, if possible, get a generator … it may be the best investment you’ve made Don’t wait until the last minute, when everyone is out there looking to purchase one. It’s like an insurance policy – you may need it; you may not need it. But having the peace of mind of having one is priceless!!

Note: Just like a car, a generator will not work without the gas needed to fuel it. If you have a generator or are thinking of getting one – make sure you are prepared with all that is needed to run it, storing all including the gas in a safe place.

Not sure what the winter months have in store for us … but being prepared can only make it easier. If you or someone you know needs any service providers to help you “get-ready” – feel free to reach out to me. I have a list of Service Providers, that come highly recommended.

Stay warm, stay safe!

Laura

The Key To your Real Estate Success

Helping buyers and sellers achieve their real estate goals.

HOME FOR THE HOLIDAYS

Buyers are looking for that place to call “HOME” even during the holiday season. Could your home be the “gift” they have been looking for?

Many sellers find themselves trying to decide whether they should sell their home during the holiday season or wait. Some sellers that already have their homes on the market, but not under contract – may make the decision to take their home off the market until the new year. Good idea? Well for some, perhaps … with the hustle & bustle of the holidays, entertaining with family & friends, may hinder your ability to be “show ready” … and that’s fine, isn’t that what the holidays are all about?

I speak mainly to the sellers, who would like to sell now, but think they should wait until after the holidays. Below are just a few reasons why now, still might just be the right time to put your home on the market.

Supply & Demand – I know I am not telling you anything you don’t already know, but nonetheless this still is true today. While buyer demand has slowed a little due to higher interest rates, and there has been a tick up in inventory – there still is not enough inventory to meet buyer demand. What does that mean to you? Less homes on the market, means less homes for you to compete with should you choose to put your home on the market during the holidays.

Serious Buyers – The buyers currently out in the market, looking during the holiday season – are serious buyers … ready, willing, and able to purchase a home. The desire to purchase a home doesn’t just stop during the holidays.

Rents – The cost of renting has gone through the roof. Many buyers are weighing their options – rent vs. buy. In most cases it doesn’t make financial sense to rent (if you have the down-payment) when you can put that money towards your monthly mortgage payment and reap the benefits of homeownership while building wealth through equity.

When is the right time to sell or buy? I will always say … when, the time is right for you/when you are ready – right? If you make the decision – that now may just be the right time to sell regardless of the time of season, do know this … to make your showings a little easier and more manageable, you can restrict your home showings to days and times that are most convenient for you. That can help you minimize disruptions, which is especially important this time of year.

If you find yourself trying to decide what would be the best decision for you, given your situation, feel free to contact me to discuss the current market, and help you weigh the pros & cons that should give you more clarity on how and when to move forward.

Laura

The Key To Your Real Estate Success

Helping buyers & sellers achieve their real estate goals

How Are Interest Rates Affecting The Real Estate Market?

With interest rates on the rise, it makes the real estate market a bit more challenging for both buyers and sellers.  Below is a little perspective on where we currently stand in the world of real estate.

For Buyers – Higher interest rates mean higher monthly mortgage payments – This only results in less buying power for potential buyers seeking to secure a mortgage.  Buyers wanting to purchase a home today may find themselves having to re-prioritize their “wants & needs” when considering their home purchase to make up the difference higher interest rates pose on your monthly mortgage payment.  

The chart below illustrates where interest rates were in January 2022, where they are now, and where they may be going – and how might this affect your monthly mortgage payment.  

In the example below, if you are looking to take out a home loan for $200,000, and take a 30-year mortgage, put a 20% down payment of $40,000, you will have a $160,000 mortgage. If you only put down 10%, you will have a $180,000 mortgage. The following table shows you how much you’ll pay each month – 

Interest RatePayment with 20% downPayment with 10% down
3.5%$718$808*
4%$764$859*
4.5%$811$912*
5%$858$966*
5.5%$908$1,022*
6%$959$1,079*
6.5%$1,011$1,137*
7%$1,064$1,197*
7.5%$1,118$1,258*

*Payment amounts shown do not include private mortgage insurance (PMI), which may be required on loans with down payments less than 20%. The actual monthly payment may be higher, this also excludes taxes and insurance.  

I would recommend that you speak to your mortgage lender about what programs they may have to offer their borrowers that may just offer you some savings along the way or in the long term.  With that you can decide what makes the best sense for you.  

Important to note:  Do keep in mind – while interest rates are higher “today” then they were 6+ months ago – we do not know where they will be tomorrow right?  But if I had to give a good guess, I believe there is a great likelihood that they will be higher tomorrow.  So, give careful consideration to your “why” before you decide to step in or step out of the market … as we only know what we know right now!

For Sellers – The rise in interest rates not only affects the buyers, but it does also affect the seller as well.  While we are still considered to be in a seller’s market in our area – it is not the craze we saw in earlier months, but still seeing multiple offers on some of our properties if the home is priced well, along with no major objections. If your “why” is telling you – now is the time to sell, speak to a trusted real estate professional who will give you an analysis on what your homes market value is in today’s market, and then price accordingly.  Pricing is key in any market and still holds true in today’s market as well. With some buyers stepping out of the market, waiting to see how everything shakes out – your buyer pool is slimming down. Add to that – the holidays are right around the corner where traditionally you will see a slowing of the market.  Speak to a trusted real estate professional to discuss what your real estate goals tare o determine how best to move forward.

There are many moving parts in today’s world that is really taking its toll on just about everything.   Nonetheless, life goes on – so having the knowledge you need to get through this place in time – will only help you in your decision-making process looking forward. 

Any questions or concerns?   Reach out to me … I am here to help!

Laura

The Key To Your Real Estate Success

Helping buyers & sellers achieve their real estate goals

TRICK QUESTION – ARE WE IN A HOUSING BUBBLE?

What’s News In Real Estate – Republished from my “Monday Morning Minute” Dated: 10/31/2022

No trick or treat will change the shifting real estate market. … 

We all can agree that the market is shifting … but to calm your fears for what that means for you as a buyer or seller is to understand what it is not …

Some fears of today, and questions that are being asked … are we in a housing bubble? The straight answer to that question is – NO… and below are some of the reasons why experts say it is not … 

Supply & Buyer Demand 

There is still a shortage of homes on the market today – which is the #1 driver of the market. To put things in perspective – during the housing crisis (2007-2010) there were too many homes for sale (many of which were short sales and foreclosures), and that is what caused prices to fall so dramatically. While supply has increased since the start of this year, there is still a shortage of inventory to meet buyer demand. There just isn’t enough inventory on the market for home prices to come crashing down like they did last time, even though some of the overheated markets may experience slight declines in home prices.

Mortgage Standards 

Prior to the housing crisis, it was so much easier to get approved for a home loan then it is today for certain. Back then banks were creating artificial demand by lowering their lending standards to make it easy to qualify for a loan and/or refinance their current home.

During the housing crisis, banks took on greater risk in the borrower and the mortgage products they offered, which led to people defaulting on their loans, foreclosures, and falling prices. Lessons learned in the banking arena … Today, things are much different, and purchasers face much higher standards from mortgage lenders to get themselves qualified for that loan. 

Foreclosures 

The number of foreclosures in today’s market are much lower since the crash, largely because buyers today are more qualified and less likely to default on their loans due to higher standards in the mortgage industry. 

It is important to note most homeowners today are “equity rich” which is quite the contrary during the housing crisis of yesteryears, when so many people owed more on their mortgages than their home was actually worth. Homeowners today have built-in equity over time, and then in addition to that, built-in equity – add the equity gains of the “market craze of 2020/2021.”

Homeowners in today’s market are in a completely different position then what was during the housing crisis. For those who face challenges today, many have the option of using their equity to sell their house and avoid the foreclosure process.

My best advice for you today… 

Fear not … today’s real estate market may have some challenges, but none that point to the “once was market crash” of years past. Whether you are a buyer or seller … speak with a trusted real estate advisor who will help uncover your fears – answer any/all of your questions … so you can make decisions on what your best move should be in today’s shifting real estate market.

Laura

The Key To Your Real Estate Success

Helping buyers & sellers achieve their real estate goals

WHAT’S AHEAD FOR THE REAL ESTATE HOUSING MARKET?  

  

 If only we had a crystal ball to know what the future holds for the real estate market…

The housing market has certainly cooled down a bit with the rise in interest rates, that is giving buyers pause. There are a wide range of opinions coming from the experts on what the real estate market has in store, from falling home prices to ongoing appreciation, with supply and demand currently being the key factor that is driving the real estate markets, regardless of all the other moving parts going on in our world. What will be is yet to be seen, however, here is some perspective …
MORTGAGE RATE 
We’ve all witnessed the rise in mortgage rates and its impact on the cost of buying and selling a home. Homebuyers have had to revise their expectations as to what they can afford. Sellers, on the other hand have had to adjust their own expectations regarding pricing their homes. 
Key takeaway: Pay close attention to mortgage rates, and when you see a period of lower rates … that’s the time buyers should lock in their rate if they are ready, willing and able.

Home sales are trending below 2019, just before the COVID pandemic. And while inventory has gone up, it is still not enough to sustain buyer demand.

With/due to the lack of inventory, combined with higher housing costs and higher mortgage rates, we are likely to see a continued decline in home sales.


HOUSING MARKET FORECAST
Dr. Lawrence Yun’s, forecast for the remainder of 2022 is the following … “We will see sales come down slightly below 2019 market. And then 2023 will be roughly even. I think on a quarterly basis we will continue to see sales decline through the third and fourth quarter. And the first quarter of next year, it will begin to increase” – Dr. Lawrence Yun NAR Chief Economist


Dr. Lawrence Yun, Chief Economist for the National Association of Realtors projections for the rest of 2022 and the year to come are outlined in the chart below. This offers a quick overview of Dr. Yun’s expectations for the rest of 2022 and for the year to come. 


Key takeaway: Home prices will continue to rise but at a slower pace. Unit sales will level off in 2023 after a 13% decline for 2022. And dollar volume for residential home sales—down 2% for 2022—will surge by 2% in 2023. 

Lastly, and as outlined in the chart below, the key thing to keep in mind is the solid buffer between housing asset valuation and mortgage debt, which argues strongly in favor of buying a home. This buffer is one of the key reasons why real estate is still the best long-term investment.


It’s important to note that there are many determining factors that come into play as to why sellers, sell and buyers, buy. It is based upon those needs most often that will be “their” determining factor on whether to make the move or not – not the market. 

Clients, friends and family ask me “how’s the market?” My answer usually is – “a bit challenging,” for some reasons I’ve outlined above in this case. But what market isn’t challenging? Even during the 2020/2021 market, there were challenges for both buyers and sellers. You as a buyer and/or seller just need to be informed of the challenges and know how to navigate through it. Speaking to a trusted real estate advisor, a trusted mortgage representative and perhaps a financial advisor to get the information you need to make good sound educated decisions is the best place to start. Don’t let the market determine what your future holds for you … learn the facts and take control of what your next move should be. 

Laura

The Key To Your Real Estate Success

Helping buyers & sellers achieve their real estate goals

WHAT ARE SOME FACTORS THAT WILL DETERMINE YOUR MORTGAGE RATE?

If you’re looking to purchase a home, most will be looking to secure a mortgage to do so.  With today’s rising interest rates, you want to make sure that you secure the lowest rate possible. Over the last couple of years, that was an easy task due to the record low interest rates we had enjoyed and seen like no other … but unfortunately, not so much the case right now.

Below are a just a few factors to consider that can and will determine your interest rate. Something you should be mindful of …

Credit Score 

There are many things a lender will look at to complete your mortgage application to get you pre-approved and ultimately approved for a mortgage, and your credit score will play a BIG factor in that.  

Freddie Mac explains:

When you build and maintain strong credit, mortgage lenders have greater confidence when qualifying you for a mortgage because they see that you’ve paid back your loans as agreed and used your credit wisely. Strong credit also means your lender is more apt to approve you for a mortgage that has more favorable terms and a lower interest rate.”

That is why it is so important to maintain a good credit score. If you find you need to improve your score, speak to a trusted mortgage advisor to give you the expert advice and guidance you need to succeed.

Loan Type

There are many types of loans, each one offering different terms for qualified buyers. The Consumer Financial Protection Bureau(CFPB) says:   

There are several broad categories of mortgage loans, such as conventional, FHA, USDA, and VA loans. Lenders decide which products to offer, and loan types have different eligibility requirements. Rates can be significantly different depending on what loan type you choose.”

Loan Term

Another factor to consider is the term of your loan. Just like with location and loan types, you have options. Freddie Mac says:   

When choosing the right home loan for you, it’s important to consider the loan term, which is the length of time it will take you to repay your loan before you fully own your home. Your loan term will affect your interest rate, monthly payment, and the total amount of interest you will pay over the life of the loan.”

Depending on your situation, the length of your loan can also change your mortgage rate.

Down Payment

If you’re a current homeowner looking to sell and make a move, you can use the home equity you’ve built over time toward the down payment on your next home. The CFPB explains:   

In general, a larger down payment means a lower interest rate, because lenders see a lower level of risk when you have more stake in the property. So, if you can comfortably put 20 percent or more down, do it—you’ll usually get a lower interest rate.”

Before you start your home search, and before you commit to a lender, do a little of your own homework to see what each lender may have to offer, based upon your own personal needs.  Interest rates can vary lender to lender, but generally speaking … interest rates in and of itself should not vary all that much.  It’s more about the individuals’ variables some of which I outlined above, that will determine the interest rate, one person to another.  

To get yourself moving on the right path … speak with a trusted real estate advisor and a trusted mortgage lender to give you the expert advice and guidance you need to get you on the best path towards home ownership.

Laura


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