I have come across many people that ask if the market has bottomed out or if the rates are going to drop more? No one can really answer these questions, but what we do know is that rates are at historic lows and the prices of homes in many places are up to half of what they were 3, 4 even five years ago.
So what is it that could be holding you back from purchasing a home? Is it your credit? Your income? Your job? Or are you waiting for the perfect moment?
For example in 2004 a 5 bedroom 3 bath 2,900 square foot home in Tracy, CA sold for $492,000. That same home is on the market today for $274,000. The interest rates in 2004 were between 5.3-5.8%. In this present market the rates are in the 3’s and 4%.(Rates vary and depend on each person’s qualifications). So just for example sake let’s use the old figures with the new to compare numbers.
If you put 20% down on the $492,000 home in 2004 and had a *5.5% 30 year fixed rate your payment would have been $2,234. You would also have another $513 a month added for property taxes. The total would have been $2,747 a month (principal, interest and taxes only).
In today’s market on a $274,000 purchase of the same home with 20% down at a *4% rate your payment would be $1,046 plus another $285 for property taxes. The total would be $1,311 (principal, interest and taxes only). Click below to search Tracy, CA homes and many other cities.
http://www.sunpacifichomes.com/
If you live near Tracy, Modesto or any other city with higher rent prices chances are you are paying close to $1,000-$1,300 or more a month. There are great programs such as the FHA loan that allows buyers to put only 3 ½% down or the VA loan which is 100% financing.
So to answer the question is now a good time to buy? The numbers can speak for themselves and each person has to evaluate their goals. If you are paying rent month after month and are able to buy it might be the right time for you. Why give a landlord your hard earned money to have nothing to show for it in the end. If you paid $1,000 a month in rent and have been for the last 5 years you have given someone else $60,000 and in the end the home is not yours.
If you need help finding the right financing, have poor or bad credit and need credit repair give me a call. I will see how I can help you. Don’t assume you have bad credit and cannot get a loan until you know for sure. There are many lenders willing and able to help you. Even if you have a BK, foreclosure or short sale let’s see what can be done. I enjoy helping people. If your credit is not a problem and ready to see some homes I am here to help.
*Please note rates and payments are solely for illustration purposes and not necessarily current rates and payments with your given scenario. Please contact a lender for up to date and current rates. Feel free to call or email for a list of lenders that can assist you.
Alex Zachariou
209-818-6699
DRE license#:01747067
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