Buying a Home in Champlin? 7 Reason's Why it's a Great idea!
It's true, the decision to purchase a new home can sometimes feel like a journey. After all, even if this is your first home or the purchase of a second home or a "move-up home", there's still a lot of details to sort out. Since a home is typically the most expensive purchase most people make in their lifetime a lot of thought is necessary.
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Now we'll dig into the 7 Reasons Why Now is The Time to Buy a New Home:
1. Homes Have Never Been More Affordable!
Most people remember the last few rough years in Real Estate where many neighborhoods were trampled by massive amounts of foreclosures followed by short sales. We'll things are looking up for home sellers alike with property values evening out to a truer market value. The deals are still there and the home prices are not inflated. It's a win for everyone in this market!
2. Interest Rates Are Still at Rock Bottom Rates!
Anytime you make a large purchase that requires a loan, you'll likely have an interest rate at which the bank is charging you for loaning the money. In times of very large interest rates, people still needed homes. Fortunately, the current low-interest rates have made it possible for many people not only to refinance out of those high-interest rate loans, but it also gives new prospective buyers the opportunity to stretch their dollar. Consider your parents, the home they likely purchased had a much higher interest rates with possibly a larger monthly payment. Low-interest rates like we're experiencing right now makes it more affordable to purchase a home and to keep a steady look at an affordable monthly payment. See the chart below for further clarification on rates versus payments.
It's true the rates will likely stay fairly low but don't sit on the fence too long. Prolonging a new home purchase could cost you! It's likely that rates will only gradually change and the rates can fluctuate at any time. You'll want to consult with your lender about the best time for locking in your interest rate.
3. Equity Build Up and Debt Pay down
Eventually, like interest rates, it's also likely that homes will continue to gain value again as well. Getting in on a good deal now will only be gaining equity in the next few years. This will cause equity in your home to build while low-interest rates make it easier to pay down the debt of a mortgage. Purchasing a home that is a short sale or a foreclosure can also reap large benefits down the road with remodels or upgrades and upgrades that can be completed over time but will show large benefits in equity when you would go to sell.
4. Home Ownership Costs are Dropping While Rental Rates Are Increasing
Many factors come with home ownership that you may not get from living in a rental property. You may currently be living in a rented townhome or apartment with the obvious rules, limited or no parking/garage, and you would not have the yard an owned single family residence could provide you. As rental rates continue to climb, you can pay a mortgage on a home you owned at a cheaper rate than if you were to rent it. Being a homeowner would give you the opportunities to make changes to your home that once may have needed permission from your landlord, a great sense of pride of ownership can be felt by finally owning a home of your own. Putting renting verses owning into perspective, say you currently rent for $800/month (which would be a pretty good deal!) with the typical 6% annual interest on increased rents, over a 10 year period you would have paid $126,536 and would have zero equity or ownership! Over that 10 year period, you would have essentially paid off the landlord's mortgage on the home. While he now owns it free and clear you own nothing.
5. Tax Deductions and Write Off's
A great part of owning a home is the write off you receive. Consult with your tax advisor on how much of a benefit this could me specifically for you, but the initial purchase of a home typically has the larger right off and then you will be able to write off interest on your loan, possible mortgage insurance if you're required to pay it and you can receive a property tax refund toward the end of the summer if you would otherwise receive a return. Yes, I know, if you rent you do receive a rental credit. Owning a home in most scenario's will give you a bigger reduction than just a rent credit return.
6. Financing Is Improving!
While our economy took a hit over the last few years, many of us saw the lending institutions receiving a bigger dent. As you can imagine lending institutions began tightening their belts and heavily scrutinizing potentials buyers credit scores, and financial documents making it harder for a buyer to qualify and obtain a loan. To recoup some of those fees, the federal government increased the private mortgage insurance that is passed on to the buyers. Buyers will typically pay private mortgage insurance if they are requesting an FHA loan with a smaller down payment program. This makes it more affordable for a buyer to purchase a home especially when they only need to come up with the minimum requirement of 3.5% down. This recent changed announced that the rate at which the mortgage insurance is figured will likely drop. Again, reducing the expense to you over the life of the loan and also making your monthly payment a little more affordable than it would have been a year or two ago.
7. Spring Is On The Way And Great Homes Will Be Hitting The Market!
All the projections are showing great Real Estate improvements this year not only with home pricing, and affordable loans, but we're projected to once again see higher sales than we saw years ago! What does this mean for a buyer? It means that the market will soon become flooded with available homes, giving you the buyer, options! These options mean that you can now get into a home you like, have options to look at and still know that you're receiving an all-time low-interest rate, better, cheaper financing options, a cheaper than rent mortgage payment and last but not least you will get to experience the pride of ownership, owning a home will bring you! Now, if you think you're ready to buy get started on my "I'm ready to buy, but I don't' know where to start checklist"! You may also call me direct to setup a buyer consultation at 612.807.4858 and we can discuss the process, I can provide you with some lender referrals and we can even look at a few homes!
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Thank you for reading Heidi Herda ~ Champlin Realtor & Resident blog, "Buying a Home in Champlin? 7 Reason's Why it's a Great idea! Don't forget to "like" my Heidi Herda Champlin Real Estate Facebook page, to receive weekly updates on the local Champlin Real Estate market!