I got the call around 4:00: “Is this a good time to buy a home?”
In fact, in recent history there has never been a better time.
And why? Because interest rates have never been lower.
Historically-low interest rates have given today’s homebuyers a significant boost in purchasing power. In the period from 1985 through 1999 – the years before the housing bubble hit – rates for a 30-year fixed mortgage ranged between six percent and 13 percent. Back then, 19.9 percent of Americans’ median monthly income went to paying their mortgage. In the fourth quarter of 2012, with mortgage rates in the 3 to 4 percent range, 12.6 percent of Americans’ monthly income went to mortgage payments, according to data provided by the Zillow Home Value Index and the U.S. Bureau of Labor Statistics.
And this despite the fact homes themselves cost 14.5% more relative to income.
Zillow Chief Economist Stan Humphries says:
The days of historically high levels of housing affordability are numbered. Current affordability is almost entirely dependent on low interest rates, and there’s no doubt that rates will begin to rise in the next few years.
In fact, the national average home price is expected to rise by 6.0 percent this year, well above previous projections. This reflects signs of a solid housing recovery as buyers return to the market.
But it also means the time to buy is now.
HECM for Purchase
HECM for Purchase allows seniors, aged 62 and older, to purchase a home and not have a monthly mortgage payment.
How does that work? The homebuyer provides a down payment, the size of which is determined by the homebuyer’s age. The HECM loan proves the rest.
That’s it. End of story. Homeowners are in the home for as long as it’s their primary residence, and never have a monthly mortgage payment. When the last person on title permanently leaves the home, the home is either sold or the family secures new financing and purchases the home.
So if you – or someone you know – is thinking of buying, the time is now. There literally has never been a better time.
Laurie MacNaughton [NMLS# 506562] ∙ Reverse Mortgage Consultant, President’s Club ∙ Middleburg Mortgage, a Division of Middleburg Bank ∙ 20937 Ashburn Road ∙ Ashburn, VA 20147 ∙ 703-477-1183 Direct ∙ LMacNaughton@MiddleburgBank.com ∙ www.MiddleburgReverse.com
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