I’m a personal finance expert and here’s the best time to buy a house

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Deciding when to buy a home is never easy.

one in TIC Toc Video with over 39,000 likes, Finance savvy john eringman The math is broken down for potential home buyers.

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John Eringman has 1.2 million followers on Tiktokcredit: tiktok/johnfence

The question of when to buy can be daunting – especially today.

last month, inflation Hit 7.9%, making potential borrowers nervous about taking out loans.

There is so much more.

Both on rent And buying is getting more expensive. According to redfinThe average monthly rent in the US increased to $1,877 in December 2021.

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The same is happening with house prices. zillow Says they will increase 22% this spring.

apart from this, mortgage rate have returned to pre-pandemic levels as markets prepare for a rate hike by the Federal Reserve.

Here’s how to approach the question John tells his fans about when to buy.

When is the right time to buy a house?

Instead of asking when the right time is, consider whether you should buy when prices are low, or when interest rates are low, John told his followers.

To best answer your question, John divides the math into two situations.

Scenario 1: Low interest rate

Let’s say you buy a house worth $600,000 at an interest rate of 3%. This is considered a low rate.

Your monthly payment will be around $2,600 per month.

more than one 30 year mortgageThe total interest paid would be approximately $248,000.

Second scenario – low price

In the second case, let’s say you buy a house for $500,000 at a 5% interest rate.

The house costs a little less than in the first scenario, but you’re paying a higher rate.

Your monthly payment will be around $2,700 per month.

For a 30-year mortgage, the total interest paid would be approximately $373,000.

do math

When interest rates were low, the buyer paid $600,000 and paid interest totaling $248,000.

When the mortgage is paid off, the buyer will have spent $848,000 on his home.

When prices were low, the buyer paid $500,000 plus total interest $373,000.

When the mortgage is paid off, the buyer will have spent $873,000 on his home.

As John told his followers, “Mathematics says you should buy when interest rates are low, not when prices are low.”

Are interest rates negotiable?

Another piece of advice for first time buyers is to negotiate.

To negotiate mortgage rates, you need to shop around.

It’s good to compare interest rates, closing costs, and any discount points.

This will give you an idea of ​​which lender has the most competitive costs over the life of a typical 30-year mortgage.

Then, you’ll need to prove to the lender that you have good credit.

Keep in mind that a strong application gives you more conversational power.

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The Sun also spoke to Realtor Jeffrey D. Halpern about this. his top tips For first time home buyers in 2022.

Also, break states Where home prices have risen the most,

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