Friday, October 27, 2023 / by Tim Elder
The real estate market is a dynamic entity, influenced by a myriad of factors ranging from economic indicators to interest rates. One strategy that often emerges in a high-interest rate market is the "buying down" of rates. But why is this seen as a favorable strategy for both buyers and sellers? Let's delve into the intricacies of this approach.
What Does "Buying Down Rates" Mean?
First, it's essential to understand the term. "Buying down" a rate refers to the process wherein a home buyer pays an upfront fee, often called "points," to their lender in exchange for a reduced interest rate on their mortgage. This can be a temporary reduction (like a 2-1 buydown) or permanent over the life of the loan.
The Benefits for Home Buyers:
Lower Monthly Payments: The most immediate benefit for home buyers is the reduction in their monthly mortgage payments. In a high-interest market, even a small percentage drop can result in significant savings over time.
Increased Purchasing Po ...
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homeownership, home buyer, home seller, selling your house, build wealth, housing affordability, affordable housing, interest rate, interest rate solution
Friday, October 27, 2023 / by Tim Elder
In the ever-evolving realm of real estate, sellers are often met with the pivotal decision of how to attract prospective buyers effectively. While a reduction in the asking price of a home is a traditional lure, under specific market situations, choosing to buy down a buyer's interest rate can be a mutually advantageous tactic. Here's why this strategy can be more favorable.
Understanding Rate Buydowns:
A fundamental understanding of rate buydowns is essential. In essence, a rate buydown involves the seller agreeing to pay "points" (prepaid interest) to the lender on behalf of the buyer, leading to a reduced interest rate for a predetermined period or the entire loan tenure. This results in decreased monthly mortgage payments for the buyer.
Advantages for Sellers:
Higher Sale Price: Offering to buy down the rate rather than reducing the home's price often allows sellers to retain a higher sale price, resulting in a better return at the sale's conclusion.
Faster Sale: I ...
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homeownership, home buyer, home seller, selling your house, build wealth, housing affordability, housing budget, affordable housing, interest rate, wealth building, interest rate solution
Friday, October 27, 2023 / by Tim Elder
Homeownership is often associated with the "American Dream." Yet, with rising property taxes, maintenance costs, and mortgage payments, it can sometimes feel more like a financial burden. But what if there was a way to transform this significant expense into a steady income stream? Converting your home into a rental property can offer numerous benefits, both immediate and long-term. Here's a dive into why making this transition might just be one of the savviest financial decisions you can make.
1. Passive Income Generation:
Renting out your property allows you to generate passive income. Instead of spending money on your home each month, you'll receive rental payments that can cover your mortgage and other expenses, with potentially some leftover as profit.
2. Property Appreciation:
Real estate typically appreciates over time. By holding onto your property and renting it out, you can benefit from both the monthly rental income and the property's potential appreciation when yo ...
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homeownership, build wealth, housing affordability, housing budget, affordable housing, wealth building, advantage of homeownership, rental income
Tuesday, September 26, 2023 / by Tim Elder
An assumable loan is a type of mortgage that allows a buyer to take over the existing mortgage of the seller when purchasing a home. This arrangement can be advantageous for both the buyer and the seller, depending on the specific terms of the assumable loan.
Here are key points to know about assumable loans:
Assumption Agreement: To assume a mortgage, the buyer and seller typically enter into an assumption agreement. This agreement outlines the terms and conditions of the assumption, including the buyer's responsibilities for the existing mortgage.
Types of Assumable Loans: Not all mortgages are assumable. The most common types of assumable loans are FHA (Federal Housing Administration) and VA (Department of Veterans Affairs) loans. Conventional mortgages are typically not assumable without lender approval.
Advantages for Buyers:
· Potentially Lower Interest Rate: If the existing mortg ...
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home buyer, home seller, housing affordability, affordable housing, interest rate, interest rate solution, assumable loan
Wednesday, August 30, 2023 / by Tim Elder
Affordable housing opportunities are being created in Greenville in order to address the challenges we are facing from the combination of low inventory and high prices to the more recently rising interest rates. Having previously been low on the political priority for years due to the political and practical complexity of housing production, skyrocketing housing prices have finally captured the attention of lawmakers at the state and local levels across the United States. While the greatest barrier to affordable housing throughout the United States is overly restrictive zoning regulations, each area is addressing the need for affordable housing in different ways. The U.S. Department of Housing & Urban Development is even weighing in with their set of best practices for communities struggling with housing shortages. Other assistance from HUD is coming via technical assistance to ensure that local government’s infrastructure investment plans are considering housing ne ...
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