First Time Homebuyer
With rising interest rates, do you think it's still a good time to purchase a single family home? This will be my wife and I's first home purchase and we can potentially get into a great home for relatively cheap due to a family friend who's giving us a considerable discount on a home in the Orland, IL area. But with the fed raising interest rates
I would buy it, better buying than renting, if you keep renting for one or two years in the hypothetical case there is a slight drop in the market (which I do not think so) you will spend more money renting than whichever value you might lose from the property.
You will be able to refinance in a few years from now.
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truthfully were still pretty close to the lower end of the interest rates. just because u didn't get the absolute bottom doesn't mean its not a good time. if you like the home id say its def a good time to buy and at least build some equity while we wait for things to get back to normal
Finding a deal is the hardest part of this business. If you have an in with a family friend on an off-market property where they are going to sell you the home at below market value, I'd take it. The rates aren't all that bad yet.
Hi @Charles Cathey!
Sounds like this is a great opportunity without actually having the numbers in front of us. I think a single family home purchase is still a good choice today even with rates rising (yet still affordable historically speaking). Especially if you're able to check off at least a couple of these boxes:
1) You're buying it under market value (look at sold listings in the last 3 months nearby for similar finishes, beds, baths, lot size)
2) It fits your current needs for a home
3) It has some "meat on the bone". Whether it's carpet, paint, flooring, landscaping/curb appeal having some ability to force appreciation is a good position to be in. (If 1 and 3 apply, you might have a good live in flip on your hands, read up on this strategy more)
4) You could rent it out and be breakeven or cash flow post move out (use the BP Calculators). You'll be able to use a low % down option to increase your ROI / Cash on Cash.
5) You could see yourself living there for 5-10 years. This gives you time to wait out market corrections and consider the other options above.
All in all, the more options available to you, the better postion you'll be in. There's a good chance that you will build equity over the next couple of years by buying a primary residence that could unlock buying power to you in the form of a HELOC.
Best of luck!
@Charles Cathey- current rates are still quite low ( historically speaking ) ..if you have an opportunity for a good deal - get a price determined and then get fully pre approved so you can make sure you can afford it and also be comfortable with the numbers ....if you are OK with this - then proceed ...if you cant get approved or the payment or cash needed is way outside your comfort zone - dont proceed
@Charles Cathey there are lots of factors to consider here and the folks above gave some great insights. Interest rates have risen, but they are still historically low. If interest rates is what is keeping you from pulling the trigger, I'd say shoot baby!
I just bought my first property and likely had many of the thoughts you're having. If you'd like somebody to talk with or bounce ideas off of, I'm all ears!
Best of luck - I'm sure you'll make the right decision. Trust your gut.
Even if your family friend wasn't able to give you a good deal, I would say it is still a good time to get a single family home. You could run the math on owning vs renting but at least with owning you're building equity, getting appreciation (inflation hedge too), and you have your own space. That way you also don't need to worry about rising rents, which is a real concern for renters. As others have pointed out in the context of historical interest rates they are still not bad. If you decide to wait on buying it's very likely that homes will continue to become less and less affordable for the average person given rising inflation & rates. When rates come down you can refinance too.
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Take it. You will never be able to time the market. Rates are being bumped up two more times this year, so this will be the cheapest money you will find. I always say, you're either paying rent (100% interest) or your mortgage ( 6% interest)