Mike Cassell-001

Michael Cassell

The question, “Is now a good time to buy a home?” has only one real and honest answer.  It depends.

Among other things; it depends on you, your credit rating, income, funds available, how long you intend to live in the area, and a host of other considerations.  Most authorities consider buying a home to be the realization of the Great American Dream.

While homeownership is not for everyone there are many good reasons to consider buying a home now:

  1. Rents are rising faster than home mortgages, approximately 5% a year. If you are buying a home and have a fixed rate mortgage your payment will only go up if the property taxes or insurance increases
  2. Both home prices and interest rates are slowly increasing. So, the sooner you buy the better.  The longer you wait the higher the costs will be.  Home prices in some areas have increased 30% since 2012.
  3. FHA mortgage insurance premiums that buyers have to pay have been reduced from 1.35% to .85%
  4. Buying a home allows you to deduct all of the interest and property taxes that you pay from personal income taxes owed; making the true cost of home considerable less than it appears.
  5. Home prices and values are increasing again and you may realize considerable gains in your equity in the home, the sooner you buy it. (Equity is the difference between what you owe on the mortgage and what you could sell the home for.)  Equity is like money in the bank that, if you desire, you can often borrow against.
  6. As a homeowner, you will have the pride of ownership and feel that you are a more stable part of the community. When you first walk in the door of the home you own you will have a completely different feeling than you do when you walk into a rental. It is your residence; your property.
  7. It really might not take much money to buy a home. Lenders often make mortgages that require a down payment of only 3% of the sales price and often make 100% mortgages, that only require payment of the settlement costs, and often the seller may pay those costs for you.
  8. If you are a Veteran you may be able to get a 100% mortgage that requires no down payment and sellers often agree to pay all of the settlement costs. So, you might be able to buy a home by only paying for an appraisal of the home which is approximately $500.
  9. An investment in your own home is the safest way to invest in your own self and to have your money build future wealth for you.
  10. The cost of materials and the shrinking amount of develop-able land tends to insure that home values will grow as the population and the demand for good housing grows.

Have you noticed all of the signs you see posted in both Baltimore and Washington that state “we buy homes.”  These investors want to buy all of the homes they can.  Why?  Because for most people buying a home is the best possible investment that they will ever make.  And by the way, we are all buying a home, right now.  If you happen to live in a rental property, you are buying the home, but unfortunately you are buying it for your landlord, not yourself.  If you live in an apartment building or complex, you and all of the other tenants together are actually buying the building or complex for the landlord and also providing him or her with a nice profit.

However, buying a home is not for everyone, if you are not going to be living in an area for at least two years, it might not be wise to buy a home, because in two years you normally would not recover the cost you put into the property.  If you feel that buying a home might be for you, or you just want more information contact a local Real Estate Broker or agent or even better start with a mortgage officer who can qualify you and let you know how much home you can buy or what you need to do, if you desire to get yourself in the position to buy.  Even if you think you are not in the position to buy, if you have the desire, call and talk to a mortgage officer, you might be pleasantly surprised.

Michael Cassell, CRB, CRS, GRI is the owner of Creative Real Estate Services in Baltimore. He is also a real estate broker, appraiser and consultant. With over 25 years of experience in the real estate industry Michael also serves as Regional Vice President of the National Society of Appraisers and is the former chairman of the Maryland Real Estate Commission. For more information visit him at mikecassell.com or by phone at (410) 922-4262.