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Tuesday, July 11, 2017

First Steps, American Dream, Low Interest

OK - maybe today's title is not as catchy as yesterday - but the message is equally important. In better explanation... when buying a home you need to take the first step. That first step gets you closer to achieving the American Dream - a home of your own! It has gotten a little easier lately and we'll talk about that too. Interest rates are down from when your parents may have bought their first home and that enables more folks to qualify for a mortgage. Finally, we will look at purchasing power and how it is impacted by lower interest rates.

Let's begin:

Many times our posts in this blog have addressed the issue of where to start - and why. There is a process called "pre-qualify" which can suggest the amount of home that you could afford. The problem is that there are SO many variables and things that the mortgage lenders look at, the pre-qual could be way off. Better is the "pre-approval" process. Knowing that you already have a pre-approval let's you shop for a home with confidence. You know what you can spend and approximately what your payment will be. It also gives confidence to the seller who is considering your offer. The seller has comfort knowing that your offer is a serious offer and you have the ability to pay. Pre-approval also eliminates disappointment later. You will not be shopping or looking at homes outside your budget. More on "pre-approval"


We truly believe in the American Dream - owning a home is a measure of success and a fundamental strategy to increase personal wealth. That statement has been on our flagship real estate site for years! We believe in it. The real estate market is perfect - or as close as it can be - for buying a home. Lenders have eased up a bit. The low interest rates have opened amazing opportunities. Sure, house prices have gone up - and will again (another reason to buy one!) - but rent prices have gone up too - and will again - and again - and again. Where do you want to be? Ready to live the dream?


We talk about low interest rates of the day - and compare them to what perhaps your parents had to pay, but lets go back even a little more - to your grandparents. There was a time when rates hit 18% - yes, 18 - YIKES! Somehow people managed to buy homes even then. But, you sure got LESS home because the majority of your payment was interest. Let us all hope we do not see that again!


So, we keep saying low interest rates give you more buying power - more home! What does that mean exactly. This is one of THE most important parts of today's post. Have a look at the chart. Rate movement has a HUGE impact on affordability. Want to discuss that? Call me - Al