John Karadsheh
Are you thinking of buying a home? Are you wondering if now is the right time?
The real estate market is on the move. First-time buyers are entering the housing market in larger numbers in recent years, and many people who have had previous short sales or foreclosures are returning to homeownership. Furthermore, other homeowners who have been waiting on the sidelines, to upsize or downsize, have started to look at their options, and are returning to the market.
Why is everyone suddenly buying now?
The numbers
Let’s look at what the experts are predicting for the upcoming year, and how that impacts home buying for you. If you are looking at a home that costs $250,000 today, and you were to finance that property at a mortgage interest rate of about 4.25 percent, putting 10 percent down ($25,000), your monthly mortgage payment (principal and interest only) would be about $1,107.
However, CoreLogic predicts home prices will appreciate by 5.1 percent in the next 12 months. Next year, that same home will cost around $262,570. Furthermore, Freddie Mac predicts, in the next year, interest rates will be a full point higher, at around 5.25 percent. Factoring these changes, your new payment would be $1,305 per month.
A year from now, you would need to have an additional down payment of $1,627 to hit the 10 percent. Plus, in the first year alone, you would spend an extra $2,376 in monthly payments. That is a difference of more than $4,000. We think there are so many better ways to spend $4,000 in a year:
- A weeklong vacation to the beach
- A new car ($333 a month)
- A home cleaning service every week ($77/week)
- Lunch out every day of the year ($10.95 per day)
But wait. Over the course of a 30-year loan, that adds up to a difference of $72,907.
Wow.
If you are hesitant about purchasing because you think you can’t make the financing work, stop and get real information about your situation (and we don’t mean online). The lending market has opened up, and we are seeing loan products with no closing costs, loans requiring only 3.5 percent down, 10 percent down jumbo loans at the same rates as traditional loans, unique jumbo financing, specifically for doctors, and even special financing for homeowners with recent short sales or foreclosures.
Call us today, and let us help you get a great deal on a home. Our clients can attest to the fact we are the best agents with whom to work in the city.
John Karadsheh is the Designated Broker for KOR Properties. He has been a Multi-Million Dollar producing agent for more than 12 years and is an Accredited Buyers Representative (ABR) and Certified Residential Specialist (CRS). In 2014, John was voted the No. 1 Real Estate Agent in Arizona by Ranking Arizona. You can reach John at (480) 568-8684, or visit his website at KORproperties.com.