John Capozzi- “Dig where the gold is unless you just want some exercise.”
“Location, location, location,” experts say is the most important real estate facet. If you are a homeowner, a home seller, or a homebuyer, the timing element determines the amount of gold you mine from your home or your financing. “Is there still gold in them there hills?” Watch out for the effects of inflation.
Inflation is pushing onto the scene, and inflation is the archenemy of low interest rates. This week the Federal Reserve chairman, Jerome Powell, announced that the Fed would continue keeping their rate low, even in the face of rising inflation. The Fed vowed they would continue to buy mortgage-backed securities to keep mortgage rates affordable. However, the bond markets have been running against the Fed's efforts like a game of chicken. “Is there gold in them there hills?” When it comes to your real estate and your mortgage financing terms, better look at laying claim to it now, before the economic landscape changes.
We still see a hot real estate market for both buyers and sellers from the mortgage office. High demand and the short supply of homes for sale are bolstering home values on the high side. High home values are golden for home sellers. Buyers see the still low fixed mortgage rates as a goldmine for them also. Buyers can lock in fixed rates that are still giving them a house payment much less than what they would be paying to a landlord for rent on a similar home.
Ways to mine gold from your home and mortgage
1. First-time homebuyers feel a lot more secure knowing the principal and interest payment on their new fixed-rate mortgage will not be increasing year after year, like when their landlord would knock on the door and raise the rent.
Johnny and his family had been paying about $1,000/month in rent in a crime-ridden area. They wanted to move to a safer neighborhood with a larger house to accommodate their expanding family size. Johnny was short on funds for a down payment, but he did have a lot of patience and persistence, and with a little bit of help with the down payment from a local agency, Johnny’s family bought the home they wanted with less than $1,000 down and a total payment under $800 per month.
2. Home sellers are bragging about the profits they are pocketing selling their homes. For example, for March 2021, Realtor.com shows the national median home price was $353,000, an increase of 13.7% from $310,000 in February 2020.
3. Refinancing and restructuring finances are still happening for homeowners. Today the pace is more frantic since mortgage rates have been climbing steadily over the last month. It is hard to find mortgage rates in the twos with no extra costs, but there are still rates to enjoy in the threes for many borrowers.
A. Refinancing to lower your rate and lower your mortgage payment
B. Refinancing to lower your rate and shorten the term on your mortgage
C. Refinancing to lower your rate and combine other debt to improve your home or reduce overall payments per month.
