An Ideal Time to Sell Your Home Might Be Now

Houses Bought As-Is for ALL CASH! Fast Closings!

If you are a home owner who contemplated selling your home, but were apprehensive, unsure or even tentative because market conditions were still not reflective of the promising signs you had expected; then now may be the time for you to take another, closer look at the real estate market.

First you will notice that the Conventional 30-Year fixed rate mortgage (FRM) at the time of this writing is 4.09% (FHA: 3.75%) which is closer to the 52-week low of 3.94% (FHA: 3.50%) than the 52-week high 4.85% (FHA: 4.60%) and therefore is more favorable for attracting more buyers.

You will be pleased to learn also that home prices – according to leading analysts – rose higher in February and March of this year, but more importantly, property values “…rose 13.1 percent compared to February 2013…” and were “…up 12.9 percent on an annual basis….” according to a Mortgage News Daily article titled, ‘Price Increases Slow in Latest Case Shiller Report,’ in which the home pricing index reports were relied upon.

And this from an article published to CNBC’s website: “Year over year, the index jumped 12.4 percent, S&P/Case-Shiller said, a slightly slower rate than February’s 12.9 percent surge but well above Wall Street’s estimates.”

What this means is the rise in property values even exceeded what the Wall street experts had predicted, and when the market out-performs analysts and experts, it might be time to approach the matter of selling in a more serious way.

However, this is not to suggest that you rely solely on what is being said here, as it is always important to do your own research and market watch in a more consistent and diligent manner using the above data as more of a starting point than a marketing plan. Another factor which must be taken into consideration is what can only be thought of as “pent-up” demand of your buying market after such a long cold winter.

Pent-up demand is a term often used by real estate professionals to describe a condition that exists in the marketplace.

It is a condition which can be described as previously restrained home buyers now eager, and maybe overly anxious, to buy a home thereby satisfying a previously overwhelming desire to acquire the home they have long coveted but were unable to, because of an existing condition that prevented them; albeit a condition they had no control to stop or to change, such a phenomenon which in this case was the weather.

The long, cold winter to which I refer is known as the polar vortex which crippled a large swath of the country, with the northeast having been hit hardest, thereby rendering any home buying activity almost non-existent.

Other factors that strengthen this current demand is the consistently low interest rates already mentioned, the sustained appreciation in property values evidenced by market data and analysis and “double-digit price increases” seen in many of the country’s metro areas over the past year supported by “home price index reports” mentioned above, as well as the ever decreasing supply of available homes for sale.

This decreasing supply of homes can be attributed to a phenomenon that has its origins in a statement made by the highly regarded and respected investor, Warren Buffett, who holds the multiple positions of chairman, president, and CEO of Berkshire Hathaway, a company he started some fifty years ago.

Candace Taylor, in her article ‘Hedge funds try to turn a profit, one home at a time’ quoted Mr. Buffett as saying that he would ‘buy up “a couple hundred thousand” single family homes if it were practical.’

Based on Mr. Buffett’s immense influence in the investment community, this statement – as with most other statements he makes – has had a tremendous influence on other investors, and was enough to create a single family home buying frenzy “so intense that distressed homes in [a number of] areas have grown scarce, driving up prices and forcing investors to expand into other markets.” Types of investors participating, and the markets in which they were first active as described by Ms. Taylor are captured in the following passage from that article:

REITs, hedge funds and private equity players have competed to buy thousands of foreclosed houses in states like California, Nevada and Arizona — where the downturn left thousands of homes available for pennies on the dollar — renting them out to yield handsome returns.

So yes, now might be as good a time as any – since the pre-recession days of last decade – to sell your home; and this time of the year when the weather is increasingly more pleasant, and potential home buyers who were almost to the point of hibernation in their places of residence due to the harsh winter weather, are more actively looking to buy that home they have wanted for such a long time, is ideal for putting your house on the market.

Click here to review mortgage financing options!

The 30 Year Fixed Rate Mortgage – Still Your Best Option?


During my years as a real estate broker and mortgage lender representative, the 30 year fixed rate mortgage was the best option for most first time home buyers, and in many cases, home owners who were refinancing. This was true for a number of reasons, most important of which, was the lower monthly payments based on a longer term. The 30 year fixed rate mortgage was, at that time, the most popular FHA-insured mortgage type and FHA mortgages were the mortgage of choice in most markets where I did business.

However, the 30 year fixed rate mortgage was also the first choice of most conventional borrowers for some of the same reasons. The total payments were spread over a longer period of time with the interest rate set for the entire term of the mortgage. That having been said, is the 30 year mortgage still an industry standard, and does it meet the specific needs of today’s mortgage borrower? Since your financing needs are, in many cases, very unique you may wish to choose a different mortgage type.

There have been many changes in the real estate and mortgage market over the last 4 years – brought on primarily by the subprime mortgage meltdown – but even if the 30 year home loan is still an industry standard, is it the right choice for you? The answer to this question will depend on a couple of factors. If, for example, you intend to sell your home within a 5 to 7 year period it may be best to take advantage of the lower rate 5 or 7 year ARM (Adjustable Rate Mortgage) because since the total payments on a 30 year mortgage are spread over a longer period of time and the interest rate set for the entire time of the mortgage, the interest rate carried on it is higher than that on an ARM.

As we mentioned, the plus side for a 30 year home loan is lower monthly payments. This attraction is somewhat dimmed by the fact that you pay $1000s extra in interest; But, your interest is 100% tax deductible (unless the US Congress changes this feature as they may be contemplating) which does lower your after-tax cost.

It offers you some flexibility so that if your financial situation changes and you have more money you can pay it off in less than 30 years, this while keeping the low monthly payments. Your payments are smaller so, in reality, you can purchase a larger roomier home. To show an example of the interest difference between 30 year home loan rates and one of the other mortgage types.

On a 30 year, 250,000 dollar loan using 4.5% interest rate your monthly payment of interest and principle would be $1,266.71; But over the next 30 years you will have paid approximately $337,500 in interest alone. Now with a 15 year home loan rate on the same amount, but a lower 15 year rate of 3.5%, you will pay $1,787.21 (principal & interest) per month and over the next 15 term, you would pay $131,250 in interest which would save you approximately $206,250 dollars.

Those numbers suggest that, if you have the will power to invest the savings gained from the lower (30 year mortgage) monthly payments, it still could be a good choice to go with the 30 year mortgage. Especially if you can find an investment that the long term payoff matches or exceeds what you would save in a 15 year mortgage. Another factor to consider is how fast you want to accrue equity in your home or to own it outright. 30 year mortgage loans take much longer for you to build equity.

The 30 mortgage is certainly attractive, and the vast majority of home buyers opted for 30-year loans based on everything that was already said; And although there have been discussion about a 35 or 40 year mortgage, and some lenders have adopted these longer term mortgages, they were never as popular as the 30 year mortgage.

However, there are still many other mortgage financing options to consider, and probably the biggest question you have to ask yourself when considering a mortgage loan is what are your financial goals? What loan plan will help you the most to reach that goal? It is clearly to your advantage to look into other home financing options for the best mortgage available for you and will best accomplish your financial goals. It may surprise you that, because of your personal situation, other plans may be more suitable for you.