Buy Your Next Home With Confidence!
First time home buyers have a lot to think about in any market. Add to that the current state of the economy with a steady unemployment rate of about 8% and one can certainly understand why home buyers today have more trepidation than ever.
Even so, today's home buyers have a lot working in their favor too. Interest rates are at historic lows with a 30-year fixed rate of only 3.25%. This makes a huge difference in a monthly mortgage payment. Consider a $500,000 loan with 20% down (the standard) at about $2,032 a month as opposed to the same loan at say 8% with a payment of a little over $3,226. Big difference!
Prices today are also working in the buyer's favor. Affordability rates are at unconventional highs. Additionally, with a large number of short sale and foreclosure properties, there is even more savings to be had. So prices are low and interest rates keep them that way. And remember, if a buyer plans on staying in their new home for many years to come, now is a great time to buy regardless of pricing fluctuations. The social benefits still remain strong and a home can be considered a long term investment. In fact, many are taking advantage of the market by investing and renting out homes. The renter ends up paying the mortgage and interest while the property accrues equity. Meanwhile, when the market inevitably turns around, the property value will likely soar!
There are still some legitimate concerns for home buyers today however. Home values are still falling so it's very important that potential buyers do their homework. Buyers should check out what employment rates are like around communities they are considering buying in. What are the values like - are they going down quickly or are they steady?
Basically, buyers should ask themselves the same basic questions when considering buying a home today, or any time: Can they afford the home? Do they plan to stay and make today's investment worthwhile? Do they have the money for the down payment and closing costs and any necessary repairs that they may end up being responsible for?
Hiring a knowledgeable real estate professional when you are buying a home is highly recommended, especially with all of the additional concerns of today's market. A good agent will be able to answer all of the buyer questions about prices, rates, homes values, and the process, as well as help find a good home in a promising community, and also walk buyers through the lending process, helping them find the right lender and the perfect loan for them.
Buying a home is a big decision, but the often pessimistic headlines can make things seem far worse than they really are. There are great deals to be had in today's market. Start by contacting a Distinctive Home Hawaii realtor today!
Michelle Trimmell, RA, MBA