Is Now the Time to Buy a Second Home - Interest Rates at a 12 Month Low
With interest rates projected to rise and inventory increasingly tight, the window for purchasing a second home at an affordable price may be starting to close. Mark Zandi, Chief economist at Moody’s Analytics predicts, “I expect we’ll be at full employment by midyear, and wage growth should continue to pick up. I also think inflation will slowly but steadily accelerate. A full - employment economy, stronger wage growth and somewhat higher core inflation would suggest that the long- term yield should rise. In the long run, fixed mortgage rates should be 5.5 to 6 percent.” *
Portland resident, Amy Hamdan decided it was time to buy their coastal second home. “Prices at the coast are not as high as they are in the Portland Metro area. After we crunched the numbers we felt comfortable with this purchase. ”, said Hamdan. According to Trulia.com the median sales price for homes in Astoria for Jan 7, 2016 to Apr 6, 2016 was $200,000 based on 47 home sales.
Those considering the purchase of a second property should increase their financial safety net, Mortgage Banker Kimberly Bean says, noting six months to a year's worth of living expenses (that includes the new housing payment) in a liquid interest-bearing account is good. Most lenders want your debt to be less than 45 percent of your monthly pretax income, which includes both home payments. Kimberly suggests to her buyers they should come to the closing table with a 20 percent down payment to eliminate the monthly expense of private mortgage insurance. A second home can be a way to help diversify your long term investments.
Amy concluded, “Summit was able to help us factor our financial goals, research the market carefully and crunch the numbers to be sure we could comfortably afford the costs. “We always felt like we were in good hands with Kimberly. She gave us options that we could comfortably afford. Having a second home has given us family time and has helped us balance our busy lives. “
Summit Mortgage Corporation has helped clients fulfill their homeownership dreams for two decades. Serving the Northwest through Conventional, FHA, USDA, VA, & JUMBO financing, Summit Mortgage Corporation processes, underwrites, and funds their transactions in-house and is licensed in Oregon, Washington and California. For more information: Go-summit.com or call: 503.223.6166
Summit Mortgage Corporation, NMLS-3236 is licensed in CA by the California Department of Business Oversight under the Residential Mortgage Act. This is not an offer for extension of credit or a commitment to lend and is subject to change without notice. Certain restrictions apply on all programs. Complete guidelines, loan applications, interest rates and annual percentage rates (APRs) are available through Summit Mortgage Corporation. Questions and Concerns may be directed to [email protected], 5331 SW Macadam Ave., Ste. 314 Portland, OR 97239. www.nmlsconsumeraccess.org/EntityDetails.aspx/COMPANY/3236. Other restrictions or limitations to any program may apply. Not all applicants will qualify. Kimberly Bean NMLS 55921 is licensed to originate loans in OR/WA/CA. * Quoted in April 2016 Scotsman Guide page 38 (RC).