This month, we feature our continuing series in which we answer common questions regarding the loan process. Today’s question: I’m told that from a lending perspective, now is a good time to buy a home, rather than waiting. Is this true? If so, why?
A. Yes, now is a good time to buy. There are two trends that make waiting to purchase a home risky, from a cost-savings perspective.
First, home prices are expected to rise significantly in the coming months. According to the Home Price Expectation Survey, which polled a panel of more than 100 economists, investment strategists and housing market analysts, home prices are likely to increase between 12.3% and 32.8% over the next five years.
Secondly, mortgage interest rates are also increasing. The National Association of Realtors, the Mortgage Bankers Association, Freddie Mac and Fannie Mae all project interest rates to rise to between 4.8% and 5.1% by July of 2014.
The effect of rising interest rates on mortgage payments is dramatic. Even a .25% change in rates can mean that potentially you could be denied a loan for your desired home based on your debt-to-income ratio. And even if you do qualify, rising prices combined with increasing interest rates means your costs to own the same home will rise steeply if you wait.
The bottom line: If you’re thinking of buying a home, all signs indicate that the time to act is now.
For more information on lending issues, call or email Lisa or Julie at Guild Mortgage today at 303-320-1556 or email at. www.
Lisa Miles: NMLS #: 286749; CO Lic #: LMB100018629
Julie Whalen: NMLS #: 252298; CO Lic #: LMB100018008
Company NMLS #: 3274. Regulated by the CO Division of Real Estate. Guild Mortgage is an equal opportunity housing lender.
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