Why You Still Win With Increasing Interest Rates
With interest rates projected to increase again in the next week or so, many of you have paused your real estate goals until you have a better pulse on the market.I’m here to tell you, the market is not as bad as you hear in the news. In fact, there is great opportunity.
I wish I had an answer for when rates would go back down, but no one knows for sure. It could be a year, or it could be 5 years.
But I know many of you don’t want to put your life on hold; you want to be in a home that meets your needs now, rather than waiting for who knows how long. In fact for some, this could be a great opportunity. Here’s how you can still proceed with your real estate plans now and not “lose” anything:
#1 - In many cases, home prices have decreased enough to give a similar monthly payment as before.
Most of us are monthly payment minded. More sellers, who have to sell, are accepting “low ball” offers that they didn’t accept before. These lower prices are giving my clients the same monthly payment, or close enough, to get the deal done.
Case in point:
On a $400,000 loan, 4% interest - $1909.66/month
On a $320,000 loan, 6.5% interest - $2022/month
Not a huge gap.
#2 There will be a big equity opportunity
Home prices are dropping, which is an equity opportunity for you. Over time, homes should appreciate, just like they’ve always done. This could be a good opportunity to buy in and get some equity through home appreciation.
#3 Don’t forget the tax write offs
Most of my clients can write off their mortgage interest. The increase in interest payments correlates with a bigger tax write off if you can take advantage.
#4 You can refinance if rates go back down
The opportunity to refinance is always there, if and when rates drop. Keep in mind, an interest drop would mean much higher home prices - so there’s actually potential for you to come out ahead by purchasing now in this market, and refinancing later on in a market where home prices have increased.
The noise in the media doesn’t help you make informed decisions - and that’s I come in and guide you towards the best decision specifically for you. With these four points, you can still get into the house of your dreams with a good monthly payment, take advantage of home value appreciation, and win over the long haul. If you’re ready to discuss buying and taking advantage of this market, give me a call!