First-time home buyers: is it time to buy a home?
Marietta, Georgia is a wonderful community of rooms located on both sides of Interstate 75, about 15 to 20 minutes northwest of Atlanta. Many of the people who live here commute to Atlanta due to its proximity, making it a very popular place to live.
It seems like potential first-time home buyers here in Marietta are teetering over a fence trying to make a decision to buy a home. They may be thinking that home prices will fall further. And / or maybe they are thinking that interest rates will go down. I’d like to address those two suggestions by giving you the top two reasons why it’s time to shop here in Georgia.
The first reason is that home purchase prices in Marietta, GA and the surrounding Cobb County area have dropped approximately 30 percent. In my professional opinion, this is one of the best times in history to buy a home here because we are at or very close to the bottom of a story that causes the market to decline. This is especially true if this is your first home because you didn’t lose anything when the housing market fell. We all look for sales in our favorite stores and especially sales with a 30% discount; This 30% discount on homes in our area is the deal of the century, literally!
Someone can argue that the housing market could fall further. While that could happen, think about this: everyone wants to buy the stock market when it is at its lowest point; we would all love to do that and most of us have to admit we’ve never gotten close. Many people buy stocks in the middle of a rising market and most buy much closer to the top when it seems safe. But smart buyers buy stocks (or houses) after they have fallen due to the reduced chances of them falling significantly further and the huge increase in the chances of profit. If this is your first time shopping, now is a good time to buy.
Second, interest rates are lower than ever. right now. During the third week of October 2010 they were 3.75% for a 30 year fixed rate loan from one of our lenders. Shocking in a good way, right?
If rates go down a bit, you won’t save as much money on a monthly payment, but if they don’t and go back up, we can quickly start to lose. (I thought a recent rate of 4.25% over 30 years was great.) Now, I have to tell you that anything under 4.0% is unbelievably fantastic.
Here’s an example to help put interest rates into perspective. Let’s say you’re looking at a $ 150,000 home in a beautiful subdivision on a quiet street in Acworth, another Atlanta suburb near Marietta. The FHA requires only a 3.5% down payment and we will use an interest rate of 3.75% for a fixed rate of 30 years. Using our fancy calculator, this results in a down payment of $ 5,250.00 and a base payment of $ 670.36 (principal and interest only) which is less than many apartments (and forget about the quiet street). If the interest rate drops to 3.5%, the basic payment only goes down $ 20.37 / month. Interest rates are fluctuating up and down right now and that’s another sign that it’s time to buy!
I suggest you use a mortgage calculator because a good one will give you more information on private mortgage insurance (PMI) and property taxes (approximately 1 to 1.25% of the purchase price in Cobb County). Both are added to your basic payment. Just use your favorite search engine and search for “mortgage calculator” and you will find many to choose from.
One last thing I would like you to consider as a first time home buyer. Hiring a Realtor® to represent you as a Buyer’s Agent is smart; they will negotiate on your behalf and represent you. You will not be charged a fee for this representation because the fees are split with the seller’s agent, which means the seller pays the commissions. Buyers need representation; hire a buyer’s agent and they will guide you through the process and make it as easy as possible.
Right now, many first-time home buyers are thinking of buying in Marietta, GA or the surrounding countryside. Some are already beginning the home buying process and we want you to know that NOW is definitely the time to purchase one of the truly beautiful homes that are available today!
Cathy Meder