Save more than daylight!

Save more than daylight!

Don't forget to set your clocks an hour ahead this Saturday before you turn in.

If you or a friend are still waiting for something to happen before you get serious about buying your next home, consider the following facts:

You can't buy a home without funds. Most of us don't have the price of a home in liquid assets, so we turn to lenders for help. When we borrow money from a lender, we have to pay for it--think of it as rent.  The rent we pay depends on the mortgage rate and the length of the loan. When rates go up, the rent for the money goes up.

• Fact: 30-year fixed mortgages are around 5% today.
• Fact: No one can guarantee that the rates will stay this low. Today's 5% may be tomorrow's 6.125%.
• Fact: A single percentage increase in mortgage "rent" results in either a higher monthly payment or a reduction in your buying power.

For example: At today's rates a $400,000 loan would result in a monthly payment of $2147 (before taxes and insurance). A 1% increase in rates would raise the monthly payment to $2398 (or reduce the price you could afford by 10%).

As I posted on March 2nd, Tacoma sales prices in February were 16% lower than they were in February of last year. If you're looking in North Tacoma, you'll find that the median price (half the homes on the market are listed above the median, half below) of the 278 homes on the market is $264,000. That means 139 homes are available for under $264,000!

Not to put too fine a point on it, if you or your friend are waiting for prices to drop, either on a home or the rent for a mortgage, you are probably making a mistake. If you're serious about buying, now is the time to get pre-qualified with a lender. 

Once you know what you can afford, beat the other buyers attracted by these low prices and rates. Historically, the market heats up right about now--Daylight Saving Time.