Tuesday, December 12, 2023 / by Tim Elder
Interest rate fluctuations significantly impact the real estate market, influencing both buyers' and sellers' decisions. While a drop in interest rates is typically seen as favorable for sellers, it also presents an important strategic consideration for buyers. Below, we delve into why a drop in interest rates gives the seller the advantage as well as why buyers should think about purchasing before a predicted drop in interest rates and how this approach can be advantageous.
The Seller’s Advantage with Lower Interest Rates
Increased Buyer Pool: Lower interest rates make mortgages more affordable, thereby expanding the pool of potential buyers. This increased demand can benefit sellers through heightened interest in their properties.
Higher Selling Prices: More buyers in the market often lead to competitive bidding, allowing sellers to command higher prices for their homes.
Faster Sales: The eagerness of buyers to capitalize on low rates often results in quicker sales, reduc. ...
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home seller, homeownership, selling your house, home buyer, sell for most money, easy sell, housing affordability, interest rate, affordable housing, interest rate solution
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
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
