First Time Home Buyers; BUY NOW!

Thanks to Rising Interest Rates, Now is your chance to buy a home.

BUY NOW, or FOREVER hold your peace.

Interest rates just hit a multi year high, levels we have not seen since 2019. What does that mean? That means that first time home buyers now have less competition as investors are pulling back from buying properties, since they buy properties based on cash flow and net operating income, otherwise known as cap rates.

As interest rates rise, cash flow decreases, and investors return less money on their investment. This is great news for first time buyers in the market that have been losing out on bids and offers due to the fierce competition. Let’s look at the impact of rising interest rates from March 21 to now.

3.75% on $500,000 would give you a payment of $2,316, while today, the average rate is 4.75% (national average) and gives you a payment of $2,608 per month, nearly $300 per month higher.

One way to offset rising interest rates is to put down more money, but in order to make up $300 per month in payment, you would have to put an extra $60,000 or so down, which just doesn’t make sense.

Remember, your mortgage interest is tax deductible, which is a great benefit to you for the first 5 years while you’re paying more interest towards your mortgage payment.