Does It Still Make Sense To Buy a Home?

By Kelly Johnson

Kelly sets a business plan at the end of each year for the following year. He commits to that business plan and requests that His Team assists. He is very goal driven, yet always makes time to be with his family, for they are the reason that he maintains high standards for himself and his business.

Many clients have recently inquired about the ideal timing for property purchases. Here’s the short answer: While it depends on your purchasing power, it’s a general truth that owning a home ends up paying off in the long run as opposed to renting. By paying your monthly payment, you build equity, which is a great way to create long-term wealth. 

Now here’s the long version: Approximately 18 months ago, the market experienced an unprecedented high, with properties consistently selling $40,000 to $50,000 above the list price. This market frenzy has now subsided, thanks to interventions by our national government that have curbed inflation. Consequently, buyers now have the opportunity to buy property at around 20% less than they would have paid a year and a half ago.

“Owning a home lets you build equity over time. ”

In addition to the more favorable pricing, flexible interest rates are currently available. Securing a fixed-rate mortgage now is a great idea since it provides stability and safeguards against future rate increases. Here are some key considerations when contemplating a new home purchase:

1. Your Credit Score. Assess your credit score and take steps to address any deficiencies. A higher credit score and a substantial down payment enhance your appeal to lenders.

2. Rate Locks. Keep a close relationship with your lender as they can guide you on the ideal time to lock in your interest rate. Rate locks typically last for 60 to 90 days, with possible extensions based on your closing timeline.

3. Mortgage Points. Evaluate the option of paying mortgage points, which are fees used to reduce your interest rate. Each point usually costs 1% of the loan amount. Depending on your situation, these points may be tax-deductible.

If you have any questions or concerns about mortgage rates and to understand your options, just call or email me. I’m here to serve as an educational resource for you and your family. Reach me directly at (317) 908-9614. I look forward to hearing from you!