How Buyers Can Easily Handle Higher Rates

 

Sharing a few easy ways that buyers can mitigate higher interest rates.

If you’re looking to buy a home, you’ve probably noticed how high interest rates are but don’t worry—it is not the end of the world. There are ways to work around interest rates that are a little higher. 

First, don't buy more than you can afford. A home you could have easily afforded last year might not be in your price range anymore. Don’t get discouraged; there are ways around that. For example, if you think your income will increase in the next couple of years, you can opt for a 2-1 buydown. 

2-1 buydowns work by lowering your interest rate for the first two years that you have the loan. For the first year, your rate is reduced by 2%, and for the second year, your rate is reduced by 1%. This allows you to ease into a higher payment. Plus, by the time the two years are up, rates may have fallen, and then you can refinance to a lower rate.

"Interest rates will come back down eventually."

2-1 buydowns require an upfront cost, but don’t stress; your seller might be willing to help you out. Right now, many sellers are struggling to find buyers who are willing to pay their full asking prices. If you offer to pay full price, it’s very likely that your seller will compensate you by paying for your 2-1 buydown through concessions. 

Another thing to consider is that with a 30-year mortgage, you’ll have plenty of time to refinance. What comes up must come down, right? Interest rates may be high right now, but they won’t be this way forever. When they inevitably fall, you can always refinance to a lower rate. 

Finally, you might be able to assume your seller’s mortgage when you purchase a new home. You’ll need to qualify for it, but if you can, you might be able to secure a mortgage with a 3% interest rate. That doesn’t sound half bad, right? 

You need to be as creative as possible when buying in today’s environment. Call or email us if you’d like to talk strategy; we are always willing to help!

Where Have All The First-Time Buyers Gone?

Why it’s so difficult for first-time buyers in this housing market.

Where the heck did all the first-time homebuyers go? It’s been tough to look for your first home these last few years: Prices have been high, and competition has been fierce. As a result, the percentage of first-time buyers in our market hit an all-time low this past year. Today I want to go over why first-time buyers have had it rough and what they can do to finally get into their first house. 

You can listen to my full explanation in the video above or skip to each topic using the timestamps provided:

0:00 — Introduction

0:43 — Why it’s been hard to be a first-time buyer

1:17 — First-time buyers also have to deal with rising rent prices

1:50 — 92% of homebuyers don’t think they can afford a mortgage

2:37 — First-time buyers are staying in their homes for longer

3:23 — Many first-time buyers are purchasing with others

3:46 — What this information means for sellers

4:07 — What this means for first-time buyers

4:44 — Wrapping up today’s topic

If you have more questions about this topic or buying your first home, please call or email us. We are always willing to help!

Happy Holidays From Us

From our team to your family, we want to wish you a happy holiday season.

We are so excited about the holiday season, and we are so thankful for you. So much of our business comes from friends like you who refer business to us and who do business with us. For that, we are so very grateful. We love helping people make their real estate dreams come true, so thank you for supporting our business. 

This may be a busy time of year, but we are always here to help you and answer any questions you may have. Call or email us, and we’d love to help you. We wish you a merry Christmas, happy holidays, and a happy new year.