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Buyer’s Market + Record Low Interest Rates…It Doesn’t Get Any Better!

Michelle Luxton
Loan Officer
NMLS ID #363495
Mann Mortgage

We are in a buyer’s market. You hear it from family, friends, and coworkers: “Now is the time to buy. Interest rates are low and so are home prices.”

But what is the true advantage of buying a home today? The combination of low interest rates, buyer-friendly loan products, and low property prices has created a winwin situation for buyers.

Mortgage rates keep marching lower and lower with new records set virtually every week…yet, how do these market conditions benefit you, the consumer? Answer: more purchase power for potential home buyers. By keeping interest rates low, the government and banks are enabling consumers to borrow money on the cheap. So, borrowers who may not have been able to qualify for a loan last year may be able to do so today, even with no change in their personal financial picture.

With home prices in Hawaii among the highest in the nation, potential buyers here need to qualify for higher loan amounts than those in other states where median home prices are significantly lower. By securing a lower interest rate, buyers can increase their purchasing power by tens of thousands of dollars without increasing their monthly mortgage payment. And, with the potential of a low or no down payment loan, that home you’ve always wanted becomes even more affordable.

Let’s take as an example the average loan amount here in Hawaii, which is $300,000. If that’s the amount you need to purchase a home, your monthly payment today would be far less than a year ago when getting 4.75% interest on a 30-year fixed mortgage was a great deal. Then, your monthly mortgage payment would have been approximately $1,564. At the current 3.75% interest rate, your monthly payment on the same size and type of loan would be approximately $1,389. Your payment drops a whopping $175 per month saving you about $2,100 per year without any extra money down.

In addition to the buyer advantage of low interest rates, home sales prices are 2% to 5% lower than they were a year ago, according to recently published statistics. And although that might not seem like much, 2% to 5% can add up to thousands of dollars in savings and more equity in the long run for the buyer. Then there’s the peace of mind factor in knowing that you are not buying at grossly inflated values and can expect to see positive equity build-up in the home.

Even from a financing standpoint, this is a buyer-friendly market. Contrary to popular belief, it is possible to get financing to purchase a home without a big down payment or with less than perfect credit. Yes, mortgage qualification standards have tightened a bit in the last few years, but only for the protection and benefit of buyers. Along with these changes have come the creation of many different loan products that both protect the buyer and ease down payment and credit requirements.

In addition to government loan programs such as USDA and VA that require zero money down at closing, there are the Fannie Mae, HomePath, and FHA loans that require only 3% to 3.5% down. We also offer conventional loan products with down payments as low as 5 to 10% and, in some cases, without the requirement of monthly mortgage insurance.

By utilizing some of these programs, you keep more cash in your pocket to make the repairs that come along with owning a home.

You may also be left in a more financially sound position, without the necessity of depleting the savings account you rely on for emergencies or future hardship.

Each potential home owner’s financial situation is vastly different. It’s always wise to consult with a trusted mortgage lender to see which program or product would fit you best. At Mann Mortgage we continue to serve our community and clients with a wide range of mortgage products including all the programs I’ve mentioned and more. We strive to provide the greatest in customer service and can be counted on to do whatever is in the best interests of our clients. If you have any questions about the home buying process or want to arrange a free consultation to see how much you could qualify for, please contact me or any of my co-workers at Mann Mortgage. We are readily available to assist you and will work diligently with you to overcome any obstacles that could prevent achieving your home ownership goals.

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