Last year, one of my clients was pondering if they should wait for lower rates or if they should buy a home. Buying a home is probably one of the largest purchases a person makes in their lifetime and it’s completely understandable how some people feel overwhelmed with the decision.
This client bought one year ago and paid $540,000 for their home. The estimated value is now around $565,000, providing a gain in equity of $25,000.
In the past year, instead of paying rent at $2000 per month, they have been paying down the mortgage balance by about $5,000. Although the amount of principal that is paid down with a mortgage, in the beginning, is a smaller amount, it’s better than shelling out $24,000 in rent.
In addition to the financial benefits, this client has had the opportunity to enjoy their home and make improvements (without having to get permission from a landlord).
In just one year, this client is ahead by roughly $30,000 when you factor the estimated appreciation and amortization gain (from making mortgage payments) that would not be realized had they decided to continue to wait for rates.
And about those interest rates? They are essentially the same as they were last year… so waiting for a lower rate would have proven to be a waste of time UNLESS we had a crystal ball and the buyer was ready to jump on a home for the few weeks in fall last year…otherwise, rates have been in a fairly tight range. And again, although experts make forecasts, we don’t know for certain if rates will be lower or higher in the future.
Now that the client owns the home that they were able to buy at $540,000, instead of waiting a year to pay $25,000 more for the very same home, I will watch mortgage rates and let them know when/if we have another refi opportunity.
If you’ve been thinking about buying a home – even if it’s a year or more away, let’s chat! It’s ideal to start talking and creating a plan early so that you can be in the best position possible. There is no cost for a discovery call or a preapproval!
It’s the day we’ve been waiting for! Okay, maybe you haven’t been anxiously looking forward to the wrap up of the FOMC’s two-day meeting and learning if they are going to adjust the Fed Funds rate. You must have more exciting things to do! 🤓 
I was in a neighborhood group on Facebook where someone was sharing that they were having to sell their home that had been in the family for generations. They can no longer afford living in the Seattle area and had made the difficult decision to move their family. If you’re 62 or better, you may not have to sell your home to create a more affordable lifestyle. 
Today I met with clients “virtually” via Zoom from the comforts of their home for a mortgage consultation. They’re getting ready to tour homes later today with their real estate agent and wanted to be prepared for what their options are in the event they find their next home. We discussed their 
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