Is now a good time to buy or refinance ?

[Patrick Himes]

Hi All- Patrick Himes with NRL Mortgage here……. A lot of questions still remain, hopefully we can answer a few of them.

Is now a good time to buy or refi?​

I’m going to wait until prices come down.​

Is this a housing bubble? ​

I’ve heard on the news the market is going to crash. ​

What happens to rates and house prices when/if there is a recession?

Should you buy now? That depends on you, rates historically have always been in an up and down wheel and very soon rates will be on the down. How soon we don’t know, but the trend has always been 1-3 years. First step is don’t believe everything you see or hear on the news because they will exploit inflation to new levels to scare folks into something that really isn’t. The facts are rates are near a normal range on a 25-year average, with is around 5-6%. If you wait for a long period, you may lose out of that home. The low rates of a few years ago were not the normal.

What about a recession, what does this do to a market? There have been 6 recessions over the past 40 years. Each of them lowered the rates during the recission, over the most recent in the years of 2008-2020, the rate has lowered by an average of .92. While rates lower during the recession, housing has historically stayed strong and a good investment. Housing demand is up as well, many who rent want to buy.

I have been in the mortgage business since 2003 and these same words and phrases that are stated above will always cause some folks to think now it not a good time to buy. Its always a good time to buy. Buying a home is the best Investment you can ever do, owning your own home, having the equity and most times its cheaper than rent.

How do I overcome the rate, by paying the principal down! When you buy a home most of the payment at first will be all Interest and a little to principal, so if you make a principal payment that drives down what goes to interest. For example, if you have a 30-year mortgage and you make one extra principal payment a year, It will take roughly 7-8 years off your mortgage. That is HUGE! So yes, buy now, make a few extra principal payments and when rates drop, refi into a new lower rate, and FYI a 15- or 20-year mortgage will have even lower rates.

Is the home overpriced? Well maybe yes or no, however if a certified appraiser licensed by the state deems the price, then it is worth that. So do a bit of research, see what similar homes did sell for, ask your agent for a BPO of the home and nearby sales. If you still think its overpriced do some more research, what can you do if you owned that home to be worth even more, especially if you’re a DIY person. Fresh landscaping, new paint, new layout, add a bath, a room, a garage, finish the basement, new roof, kitchen etc are just some ways to add 20,30,40K to the value with sometimes minimal investment.

The long of the short is its always a good time to buy, and yes there are always questions and obstacles to overcome at times. But you have the power to place yourself in the best position to buy. Step one know your FICO score, keep it high. Anything under 640 you’re going to pay points or have a ½ to ¾ higher rate. Anything over 720 your golden. Key points don’t be late on anything 30 days ever, and don’t max out a credit card. The rule of thumb is keeping your limit within 10% of the credit your lent. Don’t pay the credit card off every month either, that can actually hurt your credit.

Keep your money in a bank, save a little each paycheck. On average you will need around 5K with sellers assist, 10K without for a home over 100K. Get on a budget to help you.

If you have questions, just don’t know what to do, please schedule an appointment with me, I can help you get there, help with a budget, get you back on track. The ball is now in your court. Hope to talk soon.

[Dre N.]

Great post, thanks for your perspective