Who Says Interest Rates Are Too High?
Homebuyers are sitting on the fence because they think rates are too high. First time buyers say they can’t afford the payments.
Here are some hard truths for first time homebuyers.
Your first house will not be your forever home, it will not be the home you die in so get over it and take the plunge. A used house will not have everything you ever wanted but even my second home buyers or new construction buyers find something is not exactly what they wanted but they adapt. Three years later they have a lot more equity and then use that equity to buy what they do want. By the way, the trend now for home sellers is to pay costs or credit buyers’ money instead of reducing the price so buyers can buy down the interest rates. It’s all about payment. A lower payment is more important than the price.
You know who has done the best job of learning this? Home builders!
Builders have found the secret of how a buyer can purchase a $500,000 home and still afford the payments. Builders have learned how to buy down interest rates to make the payment fit. Many offer 2.75% for a year, 3.75% for a second year and years 3-30 at 4.75%. Or how about 4.75% for seven years. Builders are offering those and many other incentives on homes they have built or are in the process of building.
If you don’t like new construction, Ohio Housing Financing Agency has 5.5% interest rates on 30-year fixed loans (5% FHA and 4.75% if you are a “Ohio Hero”).
Quit waiting on the perfect house in the perfect location, just get in a house and let it appreciate and then use that equity to buy the forever house.
One more thing, if you are a parent and looking for ways to help your kids buy a home, please look into Ohio’s Homebuyer Plus Program. It allows you, your kids and any blood relative to open a savings account (like a 529 plan) that pays above average interest rates (currently 6.5% APY at certain banking institutions) that can be used for a downpayment on a home. Please do yourself and your kids a favor and look into it or please contact me for more information.
You can also download my radio show/podcast on this topic. Just search The Paul George Real Estate Show on any major podcast platform and find episodes 44 and 59 to learn more about this great program.
Please contact me to discuss the many opportunities out there. The longer you sit on the fence, the higher the prices will be when you do decide to get in the game.
