This Time of Year: Winter is widely viewed as a great time to buy a home. Sellers typically perceive demand at this time of year to be slow, and therefore Buyers can secure deals that may not be available during other times of the year. I spoke with the owner of a local moving company today, and she was breathless. She told me that they are so busy right now they are having a hard time keeping up…. What she is seeing in her business is an uptick in home purchases… and no wonder! Low interest rates/low prices/a few years of pent-up demand… tis the season!
If you want to take advantage of the annual winter-slowdown as a Buyer, here are some things you will want to do:
– Secure the cash for your down-payment.
– Check your credit score and correct any mistakes.
-Get to know your chosen neighborhood; have your Realtor assemble data on recent sales… in short, be prepared with the facts.
– Walk or drive around your chosen neighborhood. Talk to residents if possible…. Get an idea of what it’s like to live there.
– Be prepared to negotiate. While you can expect to secure a great deal in this market and season, listen to your Realtor regarding how far to go & not go… you want the home you fall in love with, and stepping over a certain line could alienate you from it’s current owners.
While rates are at near-historic lows, they are expected to rise. According to Pat Goodell and Academy Mortgage, rates are expected to rise before prices bottom… and rates affect your financial picture more than price. Here is a scenario that should interest you:
Say a couple wants a P & I mortgage payment today of approximately $1025. At 4.5% they could get a $202,000 loan today.
Here is what that same payment will get them at higher interest rates:
12.5% $ 96,000
So… the point is that a 3% increase in rates can reduce our subject couple’s purchasing power by 25%.
I hope this information has been helpful.
As always, please feel free to call or email with questions, or to ask for help.