Will 2015 be your year to finally get your house hunt underway? There are some pretty good reasons why it should be. Let's investigate.
Since the 2008 housing crisis melted the real estate market, gun-shy lenders have made buying a home challenging during the last several years. But, according to Wise Bread, this may be the time to finally strike.
Renting is super pricey right now — Renting is always a cost/convenience equation, but if you're sticking around your city, throwing away money on rent (as opposed to investing in a mortgage) gets harder to swallow as rents rise significantly in many big city markets (including mine —NYC is going craaazy).
Lower down payments — In the past, most mortgages required at least 5% down. As of 2015, Frannie Mae and Freddie Mac began offering a mortgage program with just 3% down. That means more (responsible) debt, but may allow you to get started on building home equity that much sooner.
Cheap mortgage insurance — If you do decide to put less than 20% down on a home, you're required to have mortgage insurance (in case you default). Now, if you take out a Federal Housing Administration loan to cover the mortgage insurance, the rate is waay down this year from 1.35% to .85% meaning your monthly mortgage total is significantly lower.
Amazing interest rates — Post housing crisis, interest rates reached 7% for many years. Finally, in 2012, rates dropped to 3%-4% and will most likely stay low for the rest of this year.
Tell us, are you in a home buying mood these days? How will you swing it?
Thanks for the tips, Wise Bread.