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What Can You Afford in Today's Market?


Here’s how interest rates affect how much house you can afford.

 
How much home can you afford with the present low interest rates? 

This week, I had a client interested in a property that was valued at $500,000, which she’s been approved for, and she’s putting 20% down. With the current interest rates at 2.875%, her monthly payment would be $2,285. A few years ago, that same property valued at the same price with a 4.5% interest rate would have been $2,652 per month, which is a difference of $367. As you can see, an increase in interest rates is the most crucial thing to consider when buying a home right now. 


"Locking in a lower interest rate is the best decision, even if you have to go a bit higher in price."

 
If we took this example a step further, and now the property is valued at $550,000 with that 2.875% interest rate, her monthly payment would be $2,513. Now let’s say she decided to wait a while; she didn’t want to get into a bidding war and drive up the price, so later the home is worth $450,000 but interest rates rose to 4.5%, her payment would climb to $2,387, which is still more expensive for her with the $50,000 drop in price than if she would have bought the house with a lower interest rate. In today’s market, locking in a lower interest rate is the best decision, even if you have to go a bit higher in price. 

If you have questions or comments about interest rates or anything else, feel free to leave them below or call us. We look forward to helping you. 

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5 Questions to Answer Before Selling Your Home


Here are five questions that every home seller should ask before listing.
 
Low inventory and interest rates are causing absolute craziness in our real estate market. If you’re thinking about selling your home, you should hold off until you’re able to answer all five of these questions confidently:

1. Where are you going to go? Are you going to sell and buy another home right away? Are you going to rent instead?

2. Are you ready for the showings? We can’t have open houses, so we’ll have to stack showing appointments on top of each other. Within the first seven days that your home is on the market, you could have up to 70 people coming through the house.

A real estate professional is the best hire you can make.

 
3. Is the house ready? You might need to make some renovations. You’ll need to do some deep cleaning and decluttering and possibly some staging before listing the property.

4. How will this affect my finances? Talk to your CPA, accountant, or tax person because if you have a large gain, you’ll likely have a larger tax bill. Know this info ahead of time and run the numbers.

5. Are you ready to hire a Realtor? A professional is the most important person you can hire. They will be able to negotiate, handle the contracts, do disclosures, and deal with any problems that might arise. You’ll be better off if you hire a professional.

These are the five big questions every home seller should be asking before they list their home on the market. If you have any questions for me, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.
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Location: Mission Viejo, CA, USA

What’s Causing People to Have More Money Lately?


Here’s how many Americans actually made money throughout the pandemic.
 
Some people have been making a lot of money this year, and there are a few reasons why.

Over the last year, the housing market has boomed. Multiple-offer situations are causing bidding wars and allowing sellers to (in my opinion) get more than their houses are actually worth. A big factor behind this has been the stock market, as most people have seen huge gains in their portfolios. A lot of people have jumped in, and many of them have made a ton of money.

People who have owned a home since the 2009 housing crash have also enjoyed equity growth in their home values. These individuals have a lot more money available to them right now; if they wanted, they could pull out their equity or refinance in order to buy an investment property.

For many Americans, the pandemic has actually increased cash flow, increased savings, and decreased debt.

 
Interest rates are also at historically low levels. We’ve seen them as low as 2.75%, though they’ve risen slightly. Still, even a 3% rate is fantastic and allows you to buy a bigger home for a lower price.

The pandemic has also played a role in a few ways. People have been saving money because they’re traveling less and avoiding restaurants, and stimulus checks have allowed many to build up their savings as well. Some people have even seen their income increase due to unemployment. A lot of people have also been given early retirement packages, and companies that have decided to relocate have given bonuses to employees that come with them. Some families are also receiving inheritance or life insurance because a loved one passed away due to COVID.

For many Americans, the pandemic has actually increased cash flow, increased savings, and decreased debt. This means that more people than ever are ready to find a home. If you are looking to buy or sell, have any questions, or would like more information, feel free to reach out to me. I look forward to hearing from you soon.
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Location: Mission Viejo, CA, USA
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