The New Year always brings new plans, including plans to move to a new address. A fresh start in a new (or new to you) home is always exciting, but it can be particularly exciting when everything falls into place for home buyers, and 2016 promises to be one of those years. Some recent changes in the industry as well as positive financial indicators all mean that if you’re considering buying now, you’ll be able to take advantage of a great market. There are several reasons that this may be the time for you to start shopping for your home:
- Mortgage interest rates are still low
Although flexible mortgage rates do flutter up and down, they are as a whole still quite low and will probably remain that way throughout 2016. If you have decent credit, you can find a fixed rate mortgage with interest rates as low as 4-4.5%. This gives buyers more flexibility on what they can afford to purchase since they will be saving thousands over the life of the loan compared to the higher mortgage interest rates of just a decade ago, when typical rates were 6.5-7% or higher. And there is no comparison to the awful interest rates of the 1980’s, when many homeowners were strapped with interest rates of 15% or more!
- The Price of Homes Is No Longer Climbing
Although housing prices plummeted during the housing crisis in 2008, they have been steadily climbing since, and you won’t have to contend with the high interest rates of a subprime loan. The stabilization of housing prices is good news for buyers, who can do more comparison shopping and negotiate more strongly with sellers.
- You Don’t Need a Huge Downpayment
The days of needing a downpayment equal to 10-20% of the value of the house are long gone. If you have a decent credit score, many lending institutions will offer you a thirty year mortgage with a downpayment that as low as 3% of your home’s value. One excellent program to look into is the Freddie Mac Home Possible Advantage program. Their website outlines the criteria and answers common questions about this innovative home buying program.
- You Can Afford Mortgage Insurance
One of the caveats of buying a home with less than 20% is that the mortgage lender will almost always require mortgage insurance when buying a home to protect the lender if you fail to keep up your end of the mortgage contract. There are several ways to get this insurance, with all providers offering impressively lower rates than just a few years ago. One of the best places to get this is the FHA (Federal Housing Administration), which is currently offering mortgage insurance for less than one percent of a house’s value in many cases.
- Homeowners Get a Substantial Federal Tax Break
Unless your mortgage is for more than a million dollars, you can deduct all your monthly interest payments on your Federal income tax return. You will also be able to deduct any points you had to pay to the lender at closing. There are a variety of additional home buyer’s tax breaks such as real estate taxes and other home buying expenses that you can learn more about from the IRS or your local tax preparer.
With so many good reasons to buy a house, it’s a great time to take advantage of the reasonable housing prices in Ellwood City, PA and the surrounding area. Take a moment to visit Look at My Homes and take a look at some beautiful homes well within your budget!