There's been a big shift in the real estate market over the last 4 to 5 months. Enough of a shift to see prices increasing and some incredible opportunities. If you own your own home and you
been waiting for the opportunity to sell and buy a bigger home, you may want to
consider that move right now. The only way to make that determination is to
take a look at your finances as well as the current market to see if a move
like this makes sense. With today's rates for every $10,000 you borrow it's
going to cost you about $35 a month in a house payment for principal and
interest. You could jump up in value by $100,000 and your payments will
increase on average by about $350 a month. In some cases less depending on what type of the mortgage you take out and how much money you are putting down on the purchase of a home.
Fear of the unknown is one of the
biggest factors they keep sellers from moving forward. This is understandable
considering the real estate market we are just coming out of. The only way to
move past that is to get answers to all the questions and make a decision based
on facts and information. Some of the things that you're going to want to know
are the following:
- What is your bottom line on the sale of your current home?
- Are there any homes available that suit your needs?
- What mortgage amount you qualify for?
- What is going on with the local real estate market?
All of these questions can be answered
by sitting down with a loan officer and a real estate agent. A lot of sellers
want to hold off for a while before they sell to increase their bottom line on
the sale of their home. This makes sense because the more you have down the
lower your mortgage amount is going to be on the home you purchase. Consider
this though there are all types of programs available with as little as 3 1/2%
down that can put you into a newer home with a lower monthly payment. If you
don't need to put as much down as you originally thought this can be something
that changes everything for you.
Everything is relative with regards to
value in real estate. Meaning if you wait for your home to go up 10% in value
chances are when you turn around to buy a new home the value of that home will have
gone up 10% as well. So the determining factor should be how much can I get for
my money when buying a house? Interest rates could stay the same for the next
two years or they could change next week we never really know so you can only base your decision on what is
happening in the real estate market currently. For every interest percentage
point the rate goes up you lose 10% of your purchasing power on a home. An
example would be a $250,000 loan at 3 1/2% will cost you $1435 a month in
principal and interest. Over the life of
the loan you will pay $151,640 in interest. That same $250,000 loan at 4 1/2%
will cost you $1579 a month in principal and interest and you will pay $203,100
in interest over the life of the loan. So that 1% difference in interest rate
will end up costing you an additional $51,460 over the life of the loan. Think
of what you can do with that amount of money.
The bottom line is that you won't know if this is a
possibility for you until you meet with a real estate professional and a loan
officer to go over all of your options.