Buy Now / Sell Later

Buy Now Here’s How…

Wouldn’t it be nice to purchase your next home and move in THEN sell your previous home?

That is how the few who have cash do it BUT it can be done with leverage.

FIRST
Your income must be sufficient to meet the debt ratio limit of having 2 house payments in addition to your other debts.

SECOND
You need the minimum down payment to purchase the next home. Here are some good sources for that down payment:

   Borrowed from an existing line of credit on your current home
   Borrowed from a 401(k)
   Liquidated from an IRA (some will allow these funds to be repaid  
   within 60 days without penalty - check with them)
   Cash on hand
   Gift from a relative

Here are some benefits of buying now and selling later:

   Non-contingent contract increases your chances of getting your offer 
   accepted
   No need to leave your home for showing appointments since the home 
   will be listed for sale when it is vacant
   When vacated then cleared out and cleaned up, your home has a better 
   chance of selling and can be professionally staged with 
   Pinette Realty Group's assistance
   No rush in moving - close on the new home and then perform any updates
   or remodeling before moving in
   Many more....

Should you desire to Buy Now/Sell Later, feel free to contact KC Harney w/Universal Lending at 303-799-9100 to discus your options. 

Nicole Pinette is a seasoned professional with over 20 years of experience and can help you get the home you want.  You Can Buy Now! 303-683-4837

Pinette Realty Group - Highlands Ranch, CO

 

 

 

 

Interest Rates Are Rising!

How will higher interest rates affect your buying power?  Rate Increase

Many times buyers resist this crazy market with multiple offers and rising prices. Although this is unsettling for many, the real concern should be rising interest rates. For example, if you were a buyer in the market Spring of 2016 and were considering buying a home at $400,000, but timing did not work out for some reason, that same home this Spring could be worth approximately $436,000 or approximately a 9% appreciation. Granted this is a hefty change, however not as much as if the interest rate increases 1%.  Let me illustrate.

If the interest rate last year was 4.0% and you fell in love with a home listed for $450,000, for giggles, imagine that the market had 0% appreciation in the past 12 months, but the interest rate this Spring is 5.0%. Given that your down payment remained the same 10% down and all other taxes, insurance and other variables in the payment remained the same, your payment would change by $214 for the same priced home this year.  How does that affect your buying power? Well to attain the same payment as last year, you would now be purchasing a $400,000 home.  A $50,000 swing in buying power is the effect of a 1% rate increase at $400,000.

In addition, the higher your price range, the higher the difference in buying power. For an FHA buyer, 3 ½% down at $225,000, their buying power would be reduced approximately $25,000 for a 1% rate increase and a larger home at $675,000, would be reduce to the $600,000 price range for the same monthly payment. As the indicators hit the market and the stock market and job employment rates are favorable, we may see rates climb this year.  We have already seen an uptick since the beginning of the year.

These are general figures, but the overall message is to consider all terms of the market that affect your payment and value when purchasing a home.  In our industry, we often see people attempting to wait out the market until the “market settles down” or “prices stabilize”. While it is always wise to not get caught up in the frenzy of the market, if you are truly looking for a home, please consider that waiting for the prices to relax may do to your buying power and overall mortgage payment. Possibly paying a little higher price on that home with a lower interest rate is not such a bad idea after all!