We know that buying a home is not something to be taken lightly, especially in today's housing climate. Investing your hard-earned money in such a large financial undertaking is a big step for any family. So, we dug in and did some research, consulted our lending experts at Flat Branch Home Loans, and found the best tips for buying a new home right now and some of the main reasons why it’s still a good time to buy.
Interest Rates Are Low
If you’re searching for a new home, I’m sure you’re asking yourself, “I know this home builder and my realtor want me to move fast, but is now actually a good time to buy? ” We love to get questions like this one! It shows that you’re thinking and being smart about this decision.
While the price of homes is continuing to rise, they have leveled off to a more normal appreciation rate, and the best news is that interest rates are still relatively low - this is great news for prospective home buyers! Low interest rates help you get more bang for your buck, and who doesn’t love saving money? According to Freddie Mac , interest rates on a 30-year fixed loan are currently at about 3%.
But what does that actually mean for you? Let’s break it down. If you purchase a home for $320,000 with a 3% interest rate and 20% down, your monthly mortgage would be $1,079, making your total interest paid after 30 years, $132,550. Now, let’s travel back to 2018 when interest rates were almost 5%. If you were to buy a home for the same price with a 5% interest rate and 20% down payment, your monthly mortgage would increase by more than almost $300, and your total interest paid after 30 years would be $238,735 (you can check out some of your own numbers at https://www.flatbranchhomeloans.com/resources/calculator ).
That’s pretty crazy, right?! Market forecasters predict that until inventory can catch up with product demands, prices will continue to rise, so take advantage of those low interest rates while you still can. On average, homes have risen about 4.9% annually since 1987. Fannie Mae has projected that home prices are going to increase 7.9% over the next year. So, while lower than this year’s 19.8% increase, you can still expect a gradual rise in home prices for 2022.
Trust Your Lenders
Nothing’s worse than finding out that your dream home isn’t within financial reach - that’s why lenders are your best friend. They know the market and programs in your area better than anyone else and have access to exclusive programs. They cater your experience to fit your individual needs, and they’ll explore options you might not be aware of that can save you money in the long run! Not sure what lender to work with? Flat Branch is a great resource to use because their goal is to get you approved, no matter your credit or financial history. Learn more about who they are and what their mission is here .
Evaluate Your Options
According to a survey on Bankrate , 60% of millennials have some regret about their recent home purchases. This is mainly due to unforeseen expenses associated with their used home and the fact that the layout of the home didn’t end up fitting their needs. As a new home builder, we want to provide you with a home that you love – that's why our New Home Specialists are expertly trained in asking the right questions to figure out which floor plan perfectly meets your needs. We also include a 2-year builder’s warranty, up to a 10-year structural warranty, and the many manufacture-provided warranties that come with your new appliances because we understand that you don’t want to spend even more money on upkeep - we wouldn’t want to either!
If you’ve shopped for a home lately, or at all in the past year or so, you know that one of the main struggles is there’s nothing available! Don’t make the same mistake as so many millennials - If your perfect lot or floor plan isn’t available to contract today, consider joining a Priority Registration List ( PRL). A PRL is a great way to ensure that you are in line for the home in the community that you want - no buyers remorse here! This solution gives us an opportunity to protect your customer experience by prioritizing and informing homebuyers as soon as something becomes available to purchase. You can sleep better at night knowing that your search is over. Read all about our PRL here.
There are so many things to consider when purchasing a new home, but if you pay attention to interest rates, get in touch with your local lender, and make sure to find the plan that works best for you, you’re off to a great start! Buying a home should be smooth sailing, especially when working with us! We want to ease any concerns that you may have – no matter how big or small.
