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Written by Tanya Terry
Dave Ramsey says now is the best time to buy a house in the next five years. Ramsey is an eight-time national bestselling author, personal finance expert and host of The Ramsey Show. The show is heard by 23 million listeners weekly.
The Courier recently talked to Tim Burgess, owner/manager of Mason Burgess Title Agency, a division of Transnation Title Agency about this.
Transnation Title Agency has been in existence since 2008.
Burgess explained why the experience within Transnation Title Agency allows them to make assessments for prospective home buyers.
“We have people who have been in this business for 30-40 years,” Burgess stated. “I’ve been in the business myself for 35 years. We’ve been through the ups and downs in the market. We know how this works.”
According to Thomas U. Olson, CEO of Transnation Title Agency the mortgage rate alone should never be the deciding factor in whether or not to buy a home. Burgess said pointed out the saying is that people have is “you date the rate and marry the home”
“Interest rates are going to go up and go down,” he added. “If interest rates are up right now, let’s say for six months, you may pay a little higher rate for six months. But at the end of that time, you can refinance to a lower rate and keep your payments lower for the remainder of your loan. I don’t discourage anyone from buying a home when interest rates are higher because interest rates are not going to stay high.”
Rates are retreating slightly and the inventory is stabilizing.
“As inflation lowers, interest rates go lower. As the economy starts to slow way down, as it’s already started to, inflation should also slow down and lower. Once that happens, everybody expects mortgage interest rates should come down.”
Burgess stated he expects a “pretty good decrease” some time mid to late year.
“In the last couple years, to be able to buy a home, it’s been crazy. It’s been a seller’s market where you put your home on the market. Before you put the sign on the yard, you get offers or more. So, it’s driving the value of the home up more. People were offering way above sale’s price to try to win that home. Now, there’s less competition for the home. So, it’s starting to turn more to a buyer’s market, to where the buyers have a little more strength when it comes to negotiating on the sale’s price.”
Burgess said in the wintertime there are typically less people looking for homes. He attributes this in part to the fact prospective buyers can’t see the landscape due to the snow.
The average rate on a 30-year loan was 6.74% as of Dec. 28, according to a national survey of lenders by Bankrate.
Burgess offered tips on negotiating mortgage points with lenders.
“You can talk to lenders to see if you can pay by points. Basically, you can pay a certain percentage of your loan amount to lower your interest rate. But, you want to make sure you see how much it lowers it by. Sometimes, if you pay per points, it may take you four or five years to break even. So, if it costs you $1,000 per point and it’s only saving you $25 a month in payment, you have to calculate that and see if it makes sense. If you’re buying a home and going to live in it a couple years, buying a point probably doesn’t make any sense. Your lender can help you do the math.”
Alternative loan types may include adjustable-rate loans, which have an interest rate that may change periodically depending on the corresponding financial index associated with the loan. Burgess said this type of loan is becoming popular because it allows homeowners to start with an initial lower rate.
Burgess stressed a good down payment and credit scores are two of the most important factors looked at when buying a home. He suggests potential home buyers go to a loan officer or bank to get advice on improving credit score. He also said there are many programs in which a good down payment is not needed, but it still helps.
Burgess strongly recommends doing research and using a realtor when considering buying or selling a home.
