You may be wondering if now is a good time to buy a new home. Well since the interest rate of your loan is the biggest factor when calculating your monthly mortgage payment, and we are currently experiencing historically low interest rates, we’d say now is the time to take advantage of the current financial climate. Low rates also mean you can put as little as 3% or 5% down and get more for your money when it comes to your home while still having a monthly mortgage payment that is within your budget. So if you are ready to purchase a new home and would like to take advantage of some of the lowest interest rates in history, competitive pricing, and down payment assistance programs, here are a few reasons why this might be the best time to purchase a new home.
More Home for Your Money
Low interest rates mean you can afford more home. This might help you plan for the future (growing family or maybe you’ve considered multi-generational living) and purchase a home with additional bedrooms and space, purchase a better built-home where the resale value might lead to better returns on your investment, or let you splurge a bit on your designer and upgrade options. Low interest rates also help your bottom line in the long-term by keeping your mortgage lower than it would have been otherwise. The bottom line is with mortgage rates staying affordable, you’ll have more money to spend on your new home.
Advantages of Owning
If you are weighing the rent vs. own option, there are many personal advantages to owning a home. From building your own equity (not your landlords!), to tax deductions, and fixed-rate payments, owning your own home provides many personal advantages. Consider these key facts:
From building your own equity (not your landlords!), to tax deductions, and fixed-rate payments, owning your own home provides many personal advantages. Consider these key facts:
- Equity: If you own, you are building equity in your home that can benefit you financially, vs. monthly rent payments that benefits your landlord, not you. Why not build that long-term nest egg?
- Tax Deduction: The interest portion of your mortgage payment may be tax-deductible. Paying rent offers no tax advantage.
- Privacy: When you rent your landlord can access your rental property at any point in time and raise your rent as they see fit. A fixed-rate mortgage locks in your monthly housing expense.
- Pride: Owning your own home allows you to customize and renovate as much as you like, which can lead to a sense of stability and pride.
- Finances: If you pay $2,500 in rent for three years, you’ve basically given someone else $90,000. Make that money add up for you, not your landlord. In most cases, ownership can be cheaper than renting.
If you’re ready to start looking for a new home, it’s helpful to have a clear understanding of what you can afford. The best way to do that is to get prequalified for a mortgage. To get prequalified, you just need to provide some financial information to your mortgage banker, such as your income and the amount of savings and investments you have. Your lender will review this information and tell you what you’ve qualified for. This will tell you the price range of the homes you should be looking at. Then as you start your search, it’s easier than ever to find information online. Most builders feature virtual tours, interactive floorplans, videos, and photos on their websites.