Updated: Jan 8, 2020
1. A Great Long Term Investment.
2. If You're Looking at Renting, Buy.
3. Interest Rates, Interest Rates, Interest Rates!
LONG TERM INVESTMENT
Buying a home is a great long term investment! Not only does it provide a roof over your head or extra income as a rental, but it will allow you to build home equity. Home equity is a really good thing and you can look at it like a forced savings account...when the value of your home rises, the equity in the home rises! It is anticipated that equity will continue to increase in the following year by about 5%.
IF YOU'RE LOOKING AT RENTING, BUY INSTEAD
Unless you get a great deal on a rental, more than likely you are paying for someone else's mortgage. In Woodland, CA, the median rent rate is approximately $1,750/month. In Davis, CA, the median rent rate is approximately $2,872/month. With buying, comes the freedom to do what you want with the property and the chance to build equity. According to the Joint Center for Housing Studies from Harvard University, "the number of renter households in the U.S. declined by more than 180,000 to 43.1 million in 2017. This was the first sign of slowing renter growth since 2004".
INTEREST RATES ARE LOW
The Fed Rate Cut
The Federal Reserve came out with an announcement on July 31st that they have cut interest rates for the first time since 2008. The 25 basis point cut is significant for home buyers, and current homeowners who are interested to refinance. Since November 2018, mortgage interest rates have dropped approximately 1.25%. Although the ten year treasury yield has already taken the cut into effect because it was anticipating the rate cut, it has continued to drop significantly throughout the past 3 days.
What it Means for First Time Homebuyers
In regards to first time homebuyers, the lower interest rates have allowed clients to qualify for more expensive homes. Lower interest rates work to offset some of the increases in the home prices in our current market, without effecting affordability. People view interest rates as the most important factor in a housing payment, but equally important is your credit score and your down payment.
What it Means for Current Homeowners
With interest rates where they currently are and home appreciation up, now could be a very beneficial time for current homeowners to refinance to either get rid of their mortgage insurance, or to lower their monthly payment. The low rates give homeowners flexibility to either lower their payment or shorten their term, depending on what financial situation the borrowers are in. If homeowners currently have a HELOC (home equity line of credit) or an adjustable rate mortgage, the Fed’s rate cut would likely help those interest rates as well.
ENVOY MORTGAGE - ZACK AUKES
He was born and raised in Woodland, CA where his family has been in the real estate industry for over thirty years. He attended Pioneer High School, and then played collegiate baseball for the University of Oregon, Cosumnes River College, and the University of California, Santa Barbara. Zack graduated from UCSB in 2018 with a BA in Communication, and minored in Sport Management. After graduation, he decided to pursue mortgage lending. For the past 10 months, he has been working for Envoy Mortgage under a great team and has learned an enormous amount about the industry. Both the financial side of the industry and the real estate aspect have influenced the way that he communicates with clients. Zack's clients understanding of the complete mortgage loan process is the main goal that he strives to achieve. Before making a decision on what loan program to choose, he gives clients all pros and cons of each specific loan program.
"I look forward to working with you!" - Zack Aukes