6 Reasons to Buy a Home in 2016December 31, 2015 12:50 pm Leave your thoughts
If you are looking to purchase a new home in 2016, here are six home-buying reasons to be thankful while ringing in the new year:
Reason No. 1: Interest rates are still at record lows
With a 30-year fixed-rate home loan still hovering around 4% on average, interest rates are still at historic lows when compared to the average rate of 18.5% in the late 1980’s! While the rates can increase anytime in the future, buying now and locking in a rate now will add significant savings in interest payements over the life of the mortgage.
Reason No. 2: Rents have skyrocketed
Rental rates are continuing to rise across the country and are even outpacing home values in some markets. With rental payments equal to home payments in many areas, it certainly makes more sense to monthly payments into an owned appreciating asset than having that money disappear forever.
Reason No. 3: Home prices are stabilizing
Home prices that have been climbing steadily upward are stabilizing, restoring a level playing field that helps buyers drive a harder bargain with sellers, and it is a great opportunity for a buyer to get in the market.
Reason No. 4: Down payments don’t need to break the bank
Probably the biggest obstacle that has prevented renters from becoming homeowners is the down payment. 20% is still the standard to aim for to avoid mortgage insurance (but more on that below), but that chunk of change can be smaller now thanks to a variety of programs to help home buyers. Government programs through Fannie Mae and Freddie Mac, in addition to various lender backed packages, allow for lower down payments for a wider range of acceptable credit scores.
Reason No. 5: Mortgage insurance is a deal, too
If you do decide to put less than 20% down on a home, you are then required to have mortgage insurance. However, the Federal Housing Administration—a government mortgage insurer that backs loans with down payments as low as 3.5% and credit scores as low as 580, can offer buyers repayment options for loans with lower fees. There are some restrictions with FHA programs so be sure to check with a lender on specific qualifications.
Reason No. 6: You’ll reap major tax breaks
Tax laws continue to favor homeowners and the biggest one is that you can deduct all the monthly interest you are paying on a home loan. Certain home-related expenses and home property taxes may also be deducted.
Remember, if you’re thinking of buying or selling your home or property, reach out to us and our expert team of agents are ready and willing to help you with your real estate needs.
Happy New Year!
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This post was written by Carley Carr