Renting? With Prices Like This?!

A lot of folk seem to be obsessed about whether or not we’ve hit bottom. When I’m asked what I think on this subject, my response right now is “Who cares? Look at the fantastic deals out there!”

Truly, my advice is stop obsessing about exact bottom and just do the math, because that’s all that matters. If I have a 2012 Ferarri worth $100K for sale for $20K, do you really care if you could maybe get it for $18K by waiting a couple of months?  I’d take it at $20K every day - with or without the wheels. Are you kidding me? I say again, do the math and stop worrying about what everyone else may or may not be doing. That’s what real investors do. They don’t follow the crowd, they follow their instincts and they follow the logic that the math dictates.

If you’re currently renting and have dreamed of owning a home, now may be the perfect time. Trulia.com is reporting that during the month of July, buying was cheaper than renting in 74% of the country’s 50 largest cities.

What’s tipping the scale to make buying cheaper than renting? Of course, it’s the declining home prices and historically low interest rates. Recently, interest rates for 30-year and 15-year fixed have been hovering near 4%. Also, the increased demand for rental units is pushing rents up, making now a good time to buy as purchasing a home is cheaper than renting one in most major U.S. cities.

This is making purchasing a home enticing for those who are planning to stay for several years and have the ability to put down a downpayment of about 20 percent.

And as reported by CNNMoney.com, Arlington, Texas; Sacramento, California; Phoenix, Arizona; and Jacksonville, Florida, “all had buy-rent ratios of eight,” according to Trulia.

New York is the highest city to rent a home (of the 50 markets surveyed). And to buy in that city would cost about 36 times as much, pushing the purchase price to about a million dollars.

Loans are tricky right now, however. With stricter lending requirements, having cash to put down is a make-or-break factor in purchasing a home. Buyers often have to come up with 20% and that can be a big chunk (or even all) of a person’s savings. Also, note that the money usually has to be “seasoned”. In other words, the downpayment money can’t just suddenly appear in your savings account only days before you decide to buy a home. Ask your real estate agent and loan officer for more details.

For more information on MetroWest Orlando homes for sale, foreclosures and short sales, see our site via the link or call us on: 407-290-3408.

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The Value of Refinancing

Making changes to your living and financial situations can be difficult.  Money and housing decisions and changes can cause anxiety and stress.  Additionally, your friends, family and mortgage lenders will all tell you different opinions about what you should do, making it almost impossible to make an unbiased decision.  Your home is your castle, and you want to make sure that you are doing what is best for you and your family.

There are several different reasons why you might be considering a mortgage refinance.  People refinance for several reasons, and it in no way is a sign of financial difficulty or danger.  Typically a refinance is beneficial.

You might be interested in taking advantage of the lower mortgage interest rates that are available since the economic downturn several years ago.  If you refinance your home, you can arrange a lower interest rate, which means your money will be used more towards the payment of your home’s principle, and not towards interest.  Perhaps you have the ability to start paying more each month towards your loan principle.  You may want to restructure your mortgage so that you can pay it off more quickly, which generally results in a lower annual interest rate.  This will allow you to purchase your home free and clear more quickly and save money on interest payments at the same time.

People will often refinance their mortgage to consolidate debts or to help fund necessary home repairs.  If you have are interested in remodeling or improving your home, you can refinance and withdraw the cash value of your home, above what is owed, to be put towards the cost of the repairs.  Additionally, if times are tight, you can extend the term of your home loan so that you pay less each month.  This generally leads to a raised interest rate on your mortgage, but will allow you to save money each month on your required payment.

If you are interested in a lower interest rate on your home loan or if you are curious to see what could potentially save, check your local mortgage refinance rates in your area and see if you could benefit from a mortgage refinance.

Guest post by Jessica Thorseon at MortgageRefinanceRates.org

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