Between work, trying to sell our house, and a very, VERY long overdue vacation with my girls, I haven't posted in almost a month. Coming soon will be an update on the process of purchasing our new home as well as a glimpse into the process of trying to sell one in this market. My hope is and always has been to use the blog to educate and enlighten as much as it is to generate business and create new wealth for my borrowers by giving them sound advice and direction on how to go through the mortgage process. I think that nothing could be more insightful in these times than an intimate look into the process of both buying and selling a home. Since I can share what I want in whatever detail I want about my own financial dealings without concern for privacy issues.....I can't think of a better way to handle it. Check back very soon and hopefully it will help you either make a decision, confirm a decision, or answer questions you may have about either process if you are also in the middle of a similar transaction.
I hope it helps and as always I am wide open to suggestions on what content any readers would like to see posted. As humbly as I can say this.....I am an expert in proper mortgage and liability management and a true mortgage planer that can help you maximize the benefits of home ownership. Whether you are a buyer, a seller, would like to look into a refinance, or a Realtor who needs a different approach to help boost your sales, use your resources! My expert advice is free and I am always happy to help.
Check for the new post soon!
Saturday, July 23, 2011
Saturday, July 2, 2011
Practice What I preach....
So I've been talking for sometime now about how it's a fantastic time to make a "Move up Purchase" if you can put it all together where it works out for you. Rates are low, home prices are depressed further still and that means you're purchasing a distressed asset with discounted interest rates.
We currently own a 1900 square foot house that my family of 3 live in comfortably. 2 adults and my 18 month old daughter are certainly not "cramped" in the house and could easily stay here, as was our plan when we bought 2 years ago, for another 3-5 years if not longer and would only need to move if we had 2 more children and they got old enough to care about having their own room. With that in mind most people would say that we are at a minimum 7 years away from "needing more house."
7 years from now, I can tell you this with about 99.9% certainty; interest rates will be substantially higher and home prices will have not only recovered but we could be in the midst of another boom cycle. All markets are cyclical and it's just our extremely poor long term memory that allows us to think the good times go on forever and when things go bad, they will never recover. We always forget past experience when things are headed to one extreme or the other so those that say "housing will never come back," they came back after the depression didn't they? Booms and busts always end and 5-7 years from what could be the bottom, maybe/maybe not, but that time frame is certainly just about right for the next cycle to be in "full bloom" and that will be the swing back the other way.
So if I waited until I "needed" more square footage for our family, I would be paying 6%-7%-8% interest? Perhaps higher? Remember, the average is 9.04% over the last 40 years so though the 8% mortgage rates almost sound foreign to us as we're spoiled by the current environment, it's still 1.04% below our average.
When rates move up it will also signal another move.....decrease in unemployment, increase in wages, increase in consumer spending, all inflation inducing actions right? The first thing everyone "upgrades" when the good times return is their home. So a flood of buyers will push demand up and since building takes 4-8 months or more, the existing inventory of homes will be pushed higher in value.
So when I 'need' more square footage we've determined the most likely scenario will be houses that have been pushed higher and higher in value and rates will be moving in the same direction so I would pay a higher sales price and finance at a higher interest rate if I wait which means I'll either spend a lot more money for the same house we're buying on August 3 or I would have to buy less house and spend the same money. (A LOT less house....)
So I'm being proactive, I'm buying it before I need it yet I can afford it because of the discounted price of the home and the discounted price of the money I'm using to buy it with. Make sense? It should and if you're interested in doing the same, let me know and I'll help you put together a game plan to make it work out with your current situation.
Here is the link for our house, if you or anyone you know is interested, we're priced to sell!!
http://www3.priv.cmls.xmlsweb.com/public/reports/ListingDetails.aspx?StartRow=1&Position=1&lid=293561&prop_type=1&report_id=c_full
We currently own a 1900 square foot house that my family of 3 live in comfortably. 2 adults and my 18 month old daughter are certainly not "cramped" in the house and could easily stay here, as was our plan when we bought 2 years ago, for another 3-5 years if not longer and would only need to move if we had 2 more children and they got old enough to care about having their own room. With that in mind most people would say that we are at a minimum 7 years away from "needing more house."
7 years from now, I can tell you this with about 99.9% certainty; interest rates will be substantially higher and home prices will have not only recovered but we could be in the midst of another boom cycle. All markets are cyclical and it's just our extremely poor long term memory that allows us to think the good times go on forever and when things go bad, they will never recover. We always forget past experience when things are headed to one extreme or the other so those that say "housing will never come back," they came back after the depression didn't they? Booms and busts always end and 5-7 years from what could be the bottom, maybe/maybe not, but that time frame is certainly just about right for the next cycle to be in "full bloom" and that will be the swing back the other way.
So if I waited until I "needed" more square footage for our family, I would be paying 6%-7%-8% interest? Perhaps higher? Remember, the average is 9.04% over the last 40 years so though the 8% mortgage rates almost sound foreign to us as we're spoiled by the current environment, it's still 1.04% below our average.
When rates move up it will also signal another move.....decrease in unemployment, increase in wages, increase in consumer spending, all inflation inducing actions right? The first thing everyone "upgrades" when the good times return is their home. So a flood of buyers will push demand up and since building takes 4-8 months or more, the existing inventory of homes will be pushed higher in value.
So when I 'need' more square footage we've determined the most likely scenario will be houses that have been pushed higher and higher in value and rates will be moving in the same direction so I would pay a higher sales price and finance at a higher interest rate if I wait which means I'll either spend a lot more money for the same house we're buying on August 3 or I would have to buy less house and spend the same money. (A LOT less house....)
So I'm being proactive, I'm buying it before I need it yet I can afford it because of the discounted price of the home and the discounted price of the money I'm using to buy it with. Make sense? It should and if you're interested in doing the same, let me know and I'll help you put together a game plan to make it work out with your current situation.
Here is the link for our house, if you or anyone you know is interested, we're priced to sell!!
http://www3.priv.cmls.xmlsweb.com/public/reports/ListingDetails.aspx?StartRow=1&Position=1&lid=293561&prop_type=1&report_id=c_full
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