I mentioned it last week. In a buyer's market like this, the deals are steals! I am seeing purchase agreements coming across my desk for very nice homes that are being sold at 2002 and 2003 prices.
In my report, "An Important Decision to Make," I wrote about the huge wealth transfer that takes place during recessions. If you are in decent financial shape and would like to move into a different home for any number of reasons (moving up, downsizing, relocating, etc.) this is the time to do it!
Yesterdays comments from Ben Bernanke and PIMCO inspired a rally in both the stock and bond markets. We saw the price of Mortgage Backed Securities close above the 200 day moving average. This is an important line. Above it, we are in for a trend of improving rates. The opposite is also true. If we remain in positive territory today, things will look good for great rates for buying and refinancing.
In fact, towards the end of the day yesterday, I helped a client lock in below 6% with a 1% buy down on his dream home purchase. The buy down cost the borrower 1% of his loan amount to lower his rate by .25%. When we looked at the return on investment, it was going to give him a 19% rate of return the first year. It will pay for itself in 5 years and from then on it will be money in the bank. This made sense for him because he has young kids and they plan to stay in the home until retirement or later.
If you are one of those who would love to move but is afraid to take action in this market, the math will prove that there is no better time to act. Take a look at my report, "An Important Decision to Make." In the report, I compare the difference between Family A's conservative, wait-it-out approach versus Family B's jump on the opportunity approach. Then I project out their results over 15 years. The numbers are impressive and powerful.
By Ronny Loew - Ronny is the Next Home Specialist with MN Home Loan Partners. Whether you are moving up, downsizing, relocating or keeping your home as an investment and buying a new primary residence, Ronny has specific strategies to make it easy and a financial win. He can be reached at 952-808-2815 or rloew@houseloan.com
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