House payments. We want to own a house and there are about 30% of Americans that don’t have a house payment but most of us do. That 30% don’t have a payment because they own the house outright. The rest of us plan to borrow money to buy one and that is where the rub comes in.
The biggest thing about buying a house with borrowed money is the payment. We are in a great time of affordability because prices are down AND interest rates are down. This will not last forever. There is some talk about house prices falling further and while I don’t know for sure I think that is unlikely in our market today. They might fall a point or two but that is about it from what I can see.
The more likely thing to happen is that interest rates will go up. We are under 5% still and it possible to qualify for a loan IF you can prove you can pay it back. We have to prove it now but that is really a good idea anyway, isnt’ it? Here is an eReport on how interest rates affect your payment vs a change in price on the house. We will feel that payment every month so it is important to understand the numbers. Go ahead and download it, give it a look and call me if you have any questions.
One thing I heard on the news today is that banks are starting to show a profit again. People are paying their mortgages, credit lines are coming current again and they are making money. I suspect that might make them a bit more confident to begin to raise rates but that is yet to be seen. However, the likelihood of a price drop of 10% is a lot smaller than an interest rate increase of 1% and they mean about the same to your payment.
Call me if I can help you with anything. I am working on pricing reports for my clients and will be sending them out so they can see if the tax bill needs to be appealed or if it is possible to do a refinance or even to see if it is time to try selling and taking advantage of the incredible pricing on a new house. Downsizing, upsizing, moving or any other change in life can be a powerful reason to start looking. Call me if I can help.
- 2011 is full of opportunity
- There you go again.