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Concerned If Rising Interest Rates Will Affect Land Prices?

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The last couple of years have been interesting in the land market. Low-interest rates and high buyer demand have created serious competition and made it more difficult for buyers to get a great deal. It is reasonable to ask how prices will change with record-breaking inflation, rising interest rates and a growing market for land.

We will only know what the future holds for prices. But, it’s possible to believe that rising interest rate may be a win-win situation for frustrated buyers.

In February, the Federal Reserve declared that it would raise interest rates multiple times this year. March saw the Federal Reserve announce a 25-basis point increase. This was the first federal interest rate increase since 2018.

These increases are in direct response to inflation. They are designed to help the economy recover by slowing down economic growth and decreasing consumer spending. The interest rates on everything, from auto loans to credit cards, are expected to continue rising. These rates will affect personal and mortgage loans, which could be used to finance land purchases.

Although we have enjoyed low interest rates for quite some time, if you are trying to purchase land, you will know that there is a downside to higher spending power.

Due to low interest rates and growing interest in land investment, there has been intense competition for properties. The REALTORS Land Market Survey shows that land prices increased by 6% between 2021 and 2021. This is second to single-family rental unit price growth. This is a steep incline, and not great news for land buyers without the capital to invest.

Higher interest rates could be a boon in this situation. Rising interest rates can help level the playing field and hopefully bring down prices by increasing borrowing costs to purchase land. Sellers don’t have the luxury of spending more money, so they can’t overvalue their property in the knowledge that someone will pay it. Higher interest rates will also help to reduce the likelihood of buyers driving price escalations or over-bidding.

While higher interest rates do not necessarily mean that you cannot afford to purchase land, they do indicate that you will need to be realistic about how much you can spend on it. Start your land search by determining how you will finance it. This includes where and how much you can borrow. Remember that interest rates are likely to rise through the end of 2022. So give yourself some leeway and don’t expect rates to stay high for too long.

If you have been on the market for a while and are having a difficult time because of high buyer demand, rising rates will help to bring things under control. If you are interested in seeing how prices react, wait a while and keep your eyes open for the perfect property with a great price.

 

Thinking of Selling your property, finding out its value is the place to start! Contact Preferred Properties of Texas and get a free evaluation.

 

Original blog: https://www.landhub.com/land-news/will-rising-interest-rates-affect-land-prices/?inf_contact_key=675bc58ad527699b5d8abbad233a50c9680f8914173f9191b1c0223e68310bb1

First Time Mortgage

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The process of buying your first home can be exciting and complicated. There are many things you need to know. The mortgage is one of the most important but also the most confusing item on this list.

We covered the basics of a mortgage in one of our articles about first-time homeownership. In this article we will go deeper into the subject and offer some tips and tricks to help you get through the process.

What criteria must I meet to get a first mortgage?

To be approved for a mortgage, homeowners must meet certain requirements. According to Investopedia, certain lenders offer Special loans and benefits for first time homebuyers

Many people are surprised to learn that there is a general definition for what a “first-time homebuyer” is. To be approved for loans for first-time homebuyers, you must meet these terms. The U.S. Department of Housing and Urban Development (HUD) has established the criteria.

  • Who hasn’t owned a primary residence for at least three years?
  • An individual who is the sole owner of a residence that is not permanently attached to a foundation
  • A single owner who has owned only with a spouse
  • An individual who only owns a property that is not compliant with building codes

There are many loan programs that can help you purchase a home if you fall into any of these categories.

Additional requirements must be met before a mortgage can be approved

Other than the requirements above, you will need to prove your income for at least two years, a down payment of 3.5% and a credit score below 620. There are many programs that will allow first-time buyers purchase without requiring them to meet these requirements.

What are the best mortgage options?

There are many mortgage options. The most popular type of home loan is the 30-year fixed mortgage. This is a traditional bank private loan. There are many other loan options. Check out the top-rated types to find one that suits your needs.

1) Federal Housing Administration loans (FHA): Insured Mortgages that require 3.5% down FHA loans are more competitive than conventional loans because they have lower interest rates, smaller downpayments, and lower closing costs.

2) U.S. 2) U.S. Department of Agriculture loans: This loan program for homebuyers is aimed at rural homes and comes with fixed payments.

3) U.S. U.S. Department of Veterans Affairs loans (VA): These loans are available for military personnel with no down-payment, including veterans and active-duty military personnel.

4) First-time homebuyer programs in Many states offer local lenders that are more suitable for the borrower’s location than national lenders. NerdWallet offers a comprehensive guide to first-time buyer programs for each state.

5) Home Renovation Loan: This loan is for homeowners who are looking to purchase and remodel their home.

6) Fannie Mae loans and Freddie Mac loans: Created in Congress, Fannie Mae loans and Freddie Mac loan are the backbone of our housing finance system. They support conventional loans with only 3% down.

Find the perfect property!

There are many options for mortgages for first-time buyers. It is important to research your options and consider your needs before you choose the right mortgage.

Contact Preferred Properties of Texas  

 

 

Original blog: https://www.landhub.com/land-news/mortgages-for-first-time-homeowners/#comment-13055

Today’s Mortgage Rates

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It is important to understand the relationship between mortgage rate and your purchasing ability if you are looking to purchase a home. Your purchasing power is the ability to afford a home that you are able to purchase. The monthly payment you pay on your home will directly affect the mortgage rates. Rates rise and so will the monthly payment that you can lock in on your home loan. This could impact your purchasing power in the future, especially in a rising rate environment such as we are currently experiencing.

The average 30-year fixed mortgage rate today is higher than 5%. Experts predict that this will rise in the coming months. If you act now, you can get ahead of this increase in your purchasing power.

If you get a smaller home loan amount, your chances of exceeding your target payment range increase. You can use this motivation to buy a house now if you are ready to do so.

When searching for a house, it is important to remember your budget. Consider what might happen if rates go up by getting preapproved. . . You should know what this would mean for your monthly expenses and how comfortable that makes you feel. This will help you to adapt if rates go up.

It doesn’t matter what, it is best to collaborate with your real-estate advisor and trusted lender to develop a plan which takes rising mortgage rates into account. You can both look at your budget and compare it to current rates, and create a strategy that you are ready for changes.

Even small increases in mortgage rates could have a significant impact on your purchasing power. It’s important to have a solid plan if you are in the process of purchasing a home. To help you achieve your homeownership dream, partner with a trusted lender and real estate advisor.

 

 

Original article: https://www.keepingcurrentmatters.com/2022/05/09/how-todays-mortgage-rates-impact-your-home-purchase/

Is It Still Affordable To Buy Right Now?

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Housing inventory is in an all-time low. Realtor.com only reported that there are 39% fewer homes for sale today than there were last year. At precisely the exact same time, customer demand stays strong.

Whenever there is a lack in the supply of a product that’s in high demand, the purchase price of that item increases. That is precisely what’s going on in the housing market right now.

This is excellent news if you are planning to sell your residence. On the other hand, as either a first-time or repeat buyer, this might instead look like troubling news. Purchasers, however, should see that the purchase price of a home isn’t quite as vital as the monthly price .

There are numerous factors that influence the expense of a house. Two of the largest ones is that the cost of the house and the mortgage rate where a purchaser can borrow the money necessary to purchase the home.

Purchasing a home today is merely a little less affordable than it had been last season, but still very affordable when compared with historic housing market tendencies.

The number one factor impacting the current homebuying affordability is record-low mortgage prices . There’s no doubt that prices are on the rise. However, mortgage rates have dropped dramatically. Last week, Freddie Mac announced that the typical rate of interest for a 30-year fixed-rate mortgage was 2.72percent . Last year at the time, the average rate was 3.68%.

If you’re considering buying your first home or moving up to the one that you’ve always hoped for, it is important to realize how affordability plays into the overall cost of your property. Bearing that in mind, buying while mortgage rates are as low as they’re now may save quite a little money over the life of your house loan.

If you’ve been thinking of selling, buying or would like to know what your home is worth, give Preferred Properties of Texas a call to speak to an agent. We are here to answer any of your real estate questions.

Preferred Properties of Texas

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