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If you've been in the real estate industry for 12 years or less, you probably think of a mortgage as a 30-year fixed loan with 20% down and a low rate. That's been the standard-issue loan for more than a decade. Now that rates are inching up (still not the end of the housing world as you know it), it's time to brush up on some options to keep payments reasonable.
Let’s talk. Julie and I have been getting a ton of agents asking about the housing market? Stop listening, reading, or hanging with negative people. YES, there is a market shift happening. and YES you can thrive. You need a newly updated business and lead gen plan. We have it for you. The best part is no cost to you. Reserve your complimentary coaching session NOW.
2 Facts first, then 3 strategies to create an acceptable payment.
Fact #1: Buying a home in today's market makes more sense than waiting...even with the higher rates. At an interest rate of 5%, the payment on a $500k purchase, financing $400k after putting 20% down will cost you $2430/month or $29,000 per year.
Here's where inflation / appreciation is on your side... After just one year, using a now-conservative estimate of 16% 'appreciation', that equals $80,000 in equity built.
Take away your $29,000 of payments and you're ahead financially by $51,000. That's after just one year.
If appreciation slows to 7% yearly, you're still breaking even on your payments versus your growth in equity.
Fact #2: If you believe that buyers are always required or expected to put 20% down, you'd be wrong. According to the National Association of Realtors, in 2021, the average down payment was 12%. Buyers under 30 years old averaged 6%. There are low or no down payment loans, and you can get a 3% down conventional loan if your credit and ratios are strong enough. Veterans usually put down 0%.
Why does that matter? Because using some cash toward rate locks, buydowns and other strategies can lock in a lower rate, thus a lower payment. Wait...what? How do you do such things?
Quiz:
Please choose one answer:
1) I am ready to join EXP Realty.
2) I am interested in EXP Realty and need more info.
3) I am not interested in EXP Realty.
Key:
* If you answered “#1” congratulations. You are about to join the fastest-growing real estate company in the world. Tim and Julie Harris are inviting you to join them at EXP Realty. Text Tim directly for the next steps: 512-758-0206. (text only please)
* If you answered “#2” please watch the videos and check out the other intel on this site. http://whylibertas.com/harris .
* If you answered ‘#3’ no worries. You will want to check out whylibertas.com/harris so you can at least know what EXP Realty is and why so many agents are moving to EXP.
Knowledge = Confidence, Ignorance = Fear. Update your mortgage education so you can think out of the box and continue to meet or exceed your own production goals. The more people you know how to help, the better you'll do in today's changing market.
Secret: Knowing about different types of loans for different types of borrowers doesn't just help you with YOUR buyers... you may find yourself finding a solution for buyers in contract on your listings. Deals are falling apart right now because no one is suggesting alternatives to the 30 year fixed. Buyers, agents and lenders are focusing on higher payments instead of different types of loans.
3 Strategies to create the right loan situation.
1 - Lock-in today's interest rates by purchasing a rate extension.
What is a rate lock and how do you extend it?
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