Morgan Hill Today 2014 03 Spring - Page 50

When the Time To Buy is Right Making the decision to purchase a home is one of the biggest decisions you will make in your lifetime. Even before you begin looking into homes on the market in your community, it’s important to consider whether now is the right time for you to buy. So is now a good time to buy a home? Professor Robert Shiller, one of the winners of this year’s Nobel Prize in Economics, certainly thinks so. Recently, he told reporters: “Affordability is still good compared to any time over the last 50 years. Mortgage rates are still around 4½ percent; that’s not high.” Although both home prices and mortgage interest rates have gone up over the past year, they are still low from an historical perspective. That’s because over the past five years, housing prices in many markets declined sharply. So recent home price increases are coming off a lower base and really just bringing prices back to where they were in the mid-2000s. Likewise, as interest rates moved up since last summer, their starting point was at a level that hadn’t been seen since FDR was president. However, these trends only tell part of the picture. There are many documented financial and social benefits to homeownership, including: Tax Deductions Mortgage interest, local real estate tax and even mortgage insurance premiums are usually taxdeductible. Building Equity In A Home With each mortgage payment and appreciation over time, homeowners increase the equity in their homes, making it their largest single asset. Borrowing Power Equity can be used in the form of a loan, for emergencies, investment properties, big ticket items, etc. Stability Property taxes may go up every year, but with the most popular fixed-rate mortgages, your cost each month is fixed. Also, remember that the alternative is to rent. And what does that get you? Buying A Home Is Good, But Why Now? Looking at recent numbers, most experts agree that now is a good time to be in the market for a new home. Home prices as of the end of 2013 were up more than 11% from 2012, according to CoreLogic. And in Denver Metro, home prices rose nearly 9.5 percent. Interest rates are also comparatively low—a 30-year fixed rate mortgage is about 4.3 percent—significantly less than it was five years ago. And remember when your parents were buying homes in the early 1980s? Rates then were nearly 20 percent. So between rates, prices, historical norms and all the ancillary financial benefits of homeownership, the timing for buying a home couldn’t be better. Luckily, you don’t need an award-winning economist to help you through the process. A mortgage lending professional can walk you through all the options in rates, length of mortgage and different products. © 2013 W.J. Bradley Mortgage Capital, LLC. 6465 Greenwood Plaza Blvd, Suite 500, Centennial, CO 80111 Phone #303-825-5670. NMLS ID 3233. Trade/service marks are the property of W.J. Bradley Mortgage Capital, LLC. This is not a commitment to lend. Restrictions apply. All rights reserved. Some products may not be available in all states. WJB is not acting on behalf of or at the direction of HUD/FHA or the federal government. All Borrowers and properties securing Mortgage Loans must be approved by WJB. Loan terms subject to change without notice. “Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act RML No. 4131002”). 50 M O R G A N H I L L T O D A Y S P R I N G 2 0 1 4