FIVE LEVELS CONSULTING
A Homebuyer Advantage, Right Now
12/21/2022
Today in the Denver market – and in many real estate markets around the country – homebuyers have an advantage. Here’s why…
Year-over-year inventory is up, so there are more homes on the market today compared to 2021. Plus, at the beginning of winter we witness a traditional slight decrease in inventory. Therefore, during this season, the clients with homes still active in the market tend to be motivated to sell. And motivated sellers allow room for negotiation. What’s best – there are purchase options that can be a win for BOTH the buyer and the seller. And the realtors, and the title company, and the loan officer, and the neighborhood. Buyers save tens-of-thousands of dollars - and these options DO NOT include reducing the home price. So, let’s call it a win-win-win-win-win-win.😊 ‘How can that be?’ you might say. Because people in the real estate industry can be very creative, resourceful, and motivated as well. And the best ones, put our clients first. Let’s take a closer look at one of the best options for all involved… Buydown Loan Programs This is a seller incentive with no additional costs to the homebuyer. Buydown loan options provides a temporary reduction in homebuyer interest rate for the first 1, 2, or 3 years of the loan. After which, the rate will revert to a fixed rate for the remainder of the loan. For example, on a 3-2-1 buydown, the homebuyer’s starting interest rate will be 3% lower for the first year, 2% lower the second year, and 1% lower the third year, before reaching the final fixed rate on year four through the term. There are several buydown programs available for buyers looking for a primary residence or a second home – including 3-2-1 buydowns, 2-2 buydowns, and 2-1 buydowns, to name a few. In best-case scenarios, buyers may also be able to tap into additional money-saving opportunities for down payments and/or closing cost reduction incentives – these include gifts from relatives, state and federal down payment assistance programs, and lender credits. For instance, on the lender credit option, U.S. Bank offers their qualified customers a percentage off their loan amount to help with closing costs up to $1,000. And if you’re not yet a U.S. Bank customer, all it takes is to open a qualified checking account. Super easy. The buydown option is a favorite for many in the real estate industry because of the advantages and benefits to all parties involved:
Savvy Loan Officers will partner with your realtor to work out the best scenario for you. Yes, it’s a buyers real estate market. Personally, I’m always looking to buy. And with these types of money-saving options, it’s getting much easier to invest. Yours, Blaise Blaise Patrick Tracy Loan Officer | NMLS #2299123 mobile 310.200.9180 | office 303.585.4167 blaise.tracy@usbank.com | linkedin.com/in/blaisetracy Learn More | Apply Here Open for mortgage loans in all 50 United States. Purchase. Refinance. Cashout. Home Equity. Land. Lot Purchase. Construction. VA and FHA loan options.
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I Got a 3% Interest Rate – Now What?
6/2/2022
It’s been such a wonderful Refi Ride for the past 40 years. Interest rates down, home prices up. Beautiful scenario for us homeowners and real estate investors. Many of us continued to refinance our homes every few years as the rates have continuously dropped since the 1980s.
Now interest rates are leveling out and creeping up and homeowners aren’t sure what to do. The good news – we have options. Investing in ourselves is wise and property is an excellent choice. Home prices will rise; they always have. Unless we flip houses for a living, we don’t have to worry about the buy-high / sell low scenario because home purchases are a longer-term investment. Heck, it doesn’t even take that long anymore to see terrific equity accumulation. I’ve personally seen many Colorado, California, and Nevada neighborhoods increase their equity by $300,000, $400,000, $500,000 or more – in just the past 10 years. Here are four actions we can take to capitalize on our real estate investments today. Plus, for each item, I’ve included factors to consider and benefits we will enjoy… PURCHASE
SELL
REFINANCE
HELOC
Find a partner you trust who is willing to walk through options with you – and no matter the market, let’s turn these next 40 years into a financial boom for ourselves! I hope this was helpful. Yours, Blaise Blaise Patrick Tracy Loan Officer | NMLS #2299123 mobile 310.200.9180 | office 303.585.4167 blaise.tracy@usbank.com | linkedin.com/in/blaisetracy Learn More | Apply Here Open for mortgage loans in all 50 United States. Purchase. Refinance. Cashout. Home Equity. Land. Lot Purchase. Construction. VA and FHA loan options. 2022 has seen the greatest rise in home mortgage interest rates since the 1980’s – and it’s still Spring.
That perspective sounds scary, doesn’t it? Similarly, the perspective of the screams of people on a roller coaster sounds scary. But instead of fear, they are experiencing an immediate thrill, a sense of joy - a positive emotion. Let us dissect the ‘fear’ of rising interest rates. And yes, I’m comparing interest rates to a roller coaster ride. Why? Because of the ups-and-downs that ALWAYS occur when we speak of real estate, buying and selling, interest rates, and investments. First, here are some facts…
Many times, our actions are driven by our emotions. These actions can be fueled by the people around us – what they say and how they react. If our behaviors are emotionally driven, the outcomes are often difficult and dangerous. Here’s a scenario that illustrates the previous statement:
Home ownership is a longer-term investment. Average time people stay in their homes is 7-10 years. Remember the 2008 recession and home value drop – devastating right? Seemed like it at the time, however it ONLY took 3.5 years for home prices to recover. That’s all. They’ve continued to increase ever since. Here is a quick list of terminology and then TWO scenarios on how the rise in interest rates PRACTICALLY impact us. TERMINOLOGY
SCENARIO A: using a $200,000 loan amount * 4% Interest Rate $955 monthly payment (P&I) 5% Interest Rate $1,074 monthly payment (P&I) 6% Interest Rate $1,199 monthly payment (P&I) SCENARIO B: using a $400,000 loan amount * 4% Interest Rate $1,910 monthly payment (P&I) 5% Interest Rate $2,147 monthly payment (P&I) 6% Interest Rate $2,398 monthly payment (P&I) Bottom line, homeownership has a LOT of benefits. My advice: Buy now and if interest rates rise, we’ve obtained a lower rate. If they fall, we refinance. Additionally, if as a homeowner we have equity, we can pull out some cash and still keep our monthly payments low. More on that in a future article – or you can call me today to hear more about this option. 😊 * these are examples for educational purposes only; they are not listings of today’s interest rates. Yours, Blaise Blaise Patrick Tracy Loan Officer | NMLS #2299123 mobile 310.200.9180 | office 303.585.4167 blaise.tracy@usbank.com | linkedin.com/in/blaisetracy Learn More | Apply Here Open for mortgage loans in all 50 United States. Purchase. Refinance. Cashout. Home Equity. Land. Lot Purchase. Construction. VA and FHA loan options. Home Ownership. Should we? Should we never? Or should we not yet?
The answer is a confident “Yes we should.” and with a clause of “As soon as possible.” My answer is yes, because I’ve done it many times, I’ve helped others do it, and we’ve always benefited. Some were glorious goldmine investments; others were tougher situations that simply needed a bit more love and attention. Bottom line: All were good investments. All. Of. Them. But what about… the housing market?… the interest rates?… the bubble bursting?... Why buy? Here are four reasons: MAKE MONEY House prices have always gone up. Always. Yes, they sometimes stall or slightly dip, but equity accumulates with each passing payment and with each passing year. We’re investing in ourselves. In time, real estate can help us make more money than most other investments because over time it is consistent and reliable. Here’s proof of value – ask your parents what they paid for their home.
SAVE MONEY With equity, we make money. With write-offs, we save money. Either way, real estate is a good financial investment. There are wonderful tax benefits to owning a home or investing in property. Since many more people are working from home these days, the value in this space has increased dramatically.
OPTIONS Live in it, rent it, sell it. Do all three over time. All have benefits. As long as we take care of it, we have options. The better we care for it, the more value it has over time and the satisfaction of living in our home increases. Whether interest rates are going up or down, here’s our plan – purchase the home. If interest rates go up, we’re locked into the lower rate. If they go down, we refinance.
DREAMS I call it home-sweet-home. It’s ours. We own it. And with this ownership good things develop within us, including personal responsibility, character development, gratitude, and we may even improve our fix-it and creative skills! We can beautify it to our taste and remodel if we wish. It feels good.
Yours, Blaise Blaise Patrick Tracy Loan Officer | NMLS #2299123 mobile 310.200.9180 | office 303.585.4167 blaise.tracy@usbank.com | linkedin.com/in/blaisetracy Learn More | Apply Here Open for mortgage loans in all 50 United States. Purchase. Refinance. Cashout. Home Equity. Land. Lot Purchase. Construction. VA and FHA loan options. |
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