Buyers: Are you too focused on the price of the home rather than your monthly payment? Let’s discuss this.
When considering your budget for buying a home, are you concentrating on price or monthly payment? Early in my career one of my mentors told me that price is a one-time thing but monthly payments are a monthly thing. That’s what’s going to determine your affordability.
Many times the buyers we meet are sticking to a specific number when the truth is that different loan programs can offer you different price options. Based on your risk tolerance, you could potentially afford more home and still have a lower monthly payment.
Another thing I want buyers to consider is that many people are talking about a recession. There are areas in Orange County where we have begun to see some prices dropping. Many clients ask, “If the prices are going down why don’t we just wait until they drop 3% to 5% and then buy?” The reason why that may not be the best approach is that interest rates play a huge role in what your monthly payment will be. Every time the rates go up 1%, property values fall 10%. What you may find is that the rates will go up higher and faster than the property values will come down. So you could get stuck buying a home for a better price but actually have a higher monthly payment, which doesn’t make sense.
As a buyer, the best option for you, no matter when you’re thinking of buying, is to speak to a lender. There are no costs, obligations, or strings attached. A lender can offer you more options. Options help us assess what the next best step moving may be for you.
If you’re a buyer and you want to talk to a lender please call or send me an email. We would love to open up our network to help you figure out what your next step might be. If you have any video ideas you want me to talk about in the future, send those my way!