On the fence about getting out of a lease and jumping into a mortgage?
It’s a big decision.
On Tuesday night, KRON4 speaks with housing industry experts with a look at mortgages. They look at whether or not you should look into owning a home or remain a renter.
To rent or to own? It’s a stressful juxtaposition potential loan borrowers are faced with when they reach out to mortgage brokers like Todd Flavio.
“No, owning is not right for everybody,” Flavio said.
Flavio is the branch manager of Supreme Lending in Walnut Creek.
“For most people, this is the most important purchase of their life,” Flavio said.
And before signing off on a 15 to possibly 40-year commitment, Flavio says, “There are options out there for people to buy a home with no money down, and in some cases, get a credit for closing costs.”
Flavio says it’s important that borrowers crunch the numbers with a professional to determine if taking on a mortgage is the right way to go.
“It doesn’t matter if you’re on the West Coast or the East Coast, or somewhere in between, there are a lot of challenges for homeowners because of the strength of the economy and appreciation, and it is, it is tough for first-time home buyers, especially right now, to purchase a home, but the numbers continue to show that there is…quite a demand for home ownership and home buyers,” Flavio said.
Mortgage Consultant Chris Hudson with C2 Financial in Walnut Creek says in recent months, the housing market has shifted in the buyer’s favor.
Bidding wars are not a thing of the past.
“Sellers are lowering prices, maybe $30,000-$40,000 below where they want,” Hudson said. “In order to create a buying frenzy to then bid the price back up to what they originally had in mind in terms of, of a sales price.”
But when applying for a mortgage, you’re not necessarily competing with the other people fighting for the home.
It’s more about your financial profile and whether or not you’re someone for whom he can approve the loan.
“The underwriting guidelines and the regulations have been tightened up so much that the buyers that are coming into the market now are a better quality buyer,” Hudson said. “There’s a lot more scrutiny, almost too much scrutiny, even for well-qualified people.”
One commonality among the mortgage experts we’ve spoken with is stressing the importance of planning ahead.
Think long-term. Start working on your move a year or so out. Save money and keep a close eye on market trends.
Depending on your down payment combined with a manageable interest rate on your loan and factoring the taxes homeowners are eligible to write-off, your monthly mortgage payment could be more affordable than locking into a lease, which means less liability, but also, no equity.