If you’re in the market for a new home, you may come across a seller who is willing to offer a “deal” in order to make the sale. But what does this mean, and how can you make sure you’re getting the best deal possible?
One common way a seller may offer a deal is through a concession, which is essentially a credit towards the buyer’s closing costs. This can be a great option for minimizing out-of-pocket expenses or even reducing the monthly payment on your loan.
However, it’s important to carefully consider the financial implications of any concessions you may be offered. Your lender should be able to provide you with the necessary information to help you determine which option is the most financially beneficial for you.
For example, if the seller is willing to offer a credit towards closing costs, it may be more financially beneficial to take that credit rather than negotiate a lower purchase price. This is because the credit can be used to buy down the interest rate on your loan, which can result in significant savings over the course of the loan term.
In conclusion, a “deal” can present itself in many different ways in today’s market, and it’s important to carefully consider all of your options before making a decision. By working with a lender and considering the long-term financial implications of any concessions or credits offered, you can ensure that you’re getting the best deal possible on your new home.
If you’re following along with the news today, you’ve likely heard about rising inflation. You’re also likely feeling the impact in your day-to-day life as prices go up for gas, groceries, and more. These rising consumer costs can put a pinch on your wallet and make you re-evaluate any big purchases you have planned to ensure they’re still worthwhile.
If you’ve been thinking about purchasing a home this year, you’re probably wondering if you should continue down that path or if it makes more sense to wait. While the answer depends on your situation, here’s how homeownership can help you combat the rising costs that come with inflation.
Homeownership Offers Stability and Security
Investopediaexplains that during a period of high inflation, prices rise across the board. That’s true for things like food, entertainment, and other goods and services, even housing. Both rental prices and home prices are on the rise. So, as a buyer, how can you protect yourself from increasing costs? The answer lies in homeownership.
Buying a home allows you to stabilize what’s typically your biggest monthly expense: your housing cost. If you get a fixed-rate mortgage on your home, you lock in your monthly payment for the duration of your loan, often 15 to 30 years. James Royal, Senior Wealth Management Reporter at Bankrate, says:
“A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.”
So even if other prices rise, your housing payment will be a reliable amount that can help keep your budget in check. If you rent, you don’t have that same benefit, and you won’t be protected from rising housing costs.
Use Home Price Appreciation to Your Benefit
While it’s true rising mortgage rates and home prices mean buying a house today costs more than it did a year ago, you still have an opportunity to set yourself up for a long-term win. Buying now lets you lock in at today’s rates and prices before both climb higher.
In inflationary times, it’s especially important to invest your money in an asset that traditionally holds or grows in value. The graph below shows how home price appreciation outperformed inflation in most decades going all the way back to the seventies – making homeownership a historically strong hedge against inflation (see graph below):
So, what does that mean for you? Today, experts say home prices will only go up from here thanks to the ongoing imbalance in supply and demand. Once you buy a house, any home price appreciation that does occur will be good for your equity and your net worth. And since homes are typically assets that grow in value (even in inflationary times), you have peace of mind that history shows your investment is a strong one.
If you’re ready to buy a home, it may make sense to move forward with your plans despite rising inflation. If you want expert advice on your specific situation and how to time your purchase, let’s connect.