3 Questions to Answer Before You Buy

Shutterstock_190978463

If you are thinking about buying a home, you likely have lots of questions floating around in your head… and have advice freely flowing from family and friends. Here are three questions to help you decide if now is a good time for YOU to be buying.

Why are you thinking about buying a home right now?

While you might be thinking about buying to escape rising rents, a study at Harvard University revealed that the four major reasons people buy a home has nothing to do with money.

  • A good place for children to grow up and get a good education
  • A place where you and your family feel safe
  • Space needs… you need more… or less… or different space
  • Ability to do what you want with your home

What is your reason for buying a home?

What do changing home values mean to you?

Home values in Minnesota rose 4.3% in 2015… 7.0% in the Twin Cities metro area. Minnesota home prices are expected to rise 4.1% in 2016… if the metro area comparison to state numbers is similar to last year, home values will appreciate about 6.7% in the Twin Cities this year.

This means if you were planning to buy a $250,000 house the end of 2015, you could expect the same house to cost about $266,750 the end of 2016. Of course we all know predictions are just that… and only time will tell reality… but you will likely need more money to buy the same home as we pass through 2016.

What impact will changing mortgage interest rates have on the home you can buy?

According to the chart below compiled by Keeping Current Matters, interest rates are expected to rise in 2016. Fannie Mae (Federal National Mortgage Association) predicts a modest rise to only 4.1%, but Freddie Mac (Federal Home Mortgage Corporation), MBA (Mortgage Bankers Association) and NAR (National Association of Realtors) predict rates will rise about .75 percent over the course of the year.

Mortgage rate projections

This means if you bought a $250,000 home with 5% down at 4.1% interest your monthly principal and interest payment would be $1,148 per month for 30 years. At 4.63% your payment would be $1,222… and at 4.9% your payment would be $1,260, a monthly increase of $110 over 4.1%.

Regardless of market conditions winter has the best home prices, but it also has the lowest inventory. If you can find a home that is a good fit for you it's a good time to buy.

Sharlene Hensrud, RE/MAX Results -  Twin Cities Buyer's Agent

The HomesMSP Team - SharleneJohnAngela Minneapolis-St. Paul Realtors

RELATED POSTS

Written By

I love what I do! Highly insightful, analytical and creative, there is nothing I love more than helping you find the right solution for your real estate transition. My mission is to serve my clients with honesty and integrity, exceeding their expectations in service and support… and to help others by donating a portion of every transaction to Habitat for Humanity.

Related Posts

How soon should you call your Realtor if you are looking ahead to buying or selling?

If you are thinking about making the call (or text or email), it’s probably time… even if you aren’t planning to actually make the move for another six months or...

Why Visit the Parade of Homes Spring 2022?

The Parade of Homes Spring 2022 is upon us! It started last weekend and goes through April 10th. Many people are not even aware when the Parade of Homes is...

Subscribe to Our Newsletter for Market Updates & Mid-Century Modern Listings

Our weekly HomesMSP Update includes current local market information and a curated list of mid-century modern properties for sale, plus posts from an inspector, a lender, a stager, info about neighborhoods, life in the Twin Cities… even recipes!
Hidden

Blog Categories

Archives

Sharon and John Hensrud

About Us

The HomesMSP Team is committed to meeting you where you are and listening… really listening to understand you so we can use our extensive knowledge of the market and local neighborhoods to give you personalized service.