Free Capital Home Show Tickets!

Want to go to the Capital Home Show this week? Is money tight? Don’t worry…I gotcha covered! I have tickets to the Capital Home Show which I am giving away for free to clients and LoudounScene.com and LoudounForeclosures.com readers.

“Nothing in life is free!”, you say? You’re right. Here’s what I ask in return…

1) I have a limited supply of tickets and they’re first-come, first-serve so if I don’t have any more left when you contact me, please don’t be angry with me

2) When contacting me, you have to give me your real name, home address, working phone number and actual email and have to be OK with hearing from me once in a while regarding what’s going on with the local real estate market

If you’re still interested, click here to contact me for your free Capital Home Show tickets. And don’t forget to put in your home address so I can either mail them to you or drop them off at your front door (I will drop them off to you as long as you live in Northern VA and not somewhere like Richmond).

Homes Values vs. Purchasing Power

Home buyers seem to mainly focus on price. Yes, price (aka home values) is important. But purchasing power (derived from interest rates) is just as, if not more important than homes values. In fact, purchasing power has an effect on home values. And many (including me) argue that purchasing power is the most important part of not just the home buying decision process, but real estate in general.

If home values and purchasing power were your birthday cake, home values would be the cake part and purchasing power would be the frosting/icing. Personally, the frosting/icing is my favorite and most important part the cake – similar to how purchasing power should be an extremely important part of the equation for all home buyers and those looking to sell and “move up”.

Let’s look at a real life example of purchasing power and how it effects you…

Let’s say you are looking to spend no more than $1500 on your monthly mortgage payment (principal and interest only).

• At today’s average rate of 4.25 percent, you can get a loan up to $304,000
• 10 years ago, rates were at 7 percent which means you could get a loan up to $225,000
• 20 years ago, rates were at 9 percent which means you could get a loan up to $186,000

Quite the difference, isn’t it?!

If words don’t really do it for you, here’s a chart comparing home values vs. purchasing power since 1991 (courtesy of Dan Green, The Mortgage Reports)…

 

 

And don’t forget about how much of an effect interest rates have on your principal loan balance and equity…

The higher the interest rate, the more of your monthly payment goes toward interest and the less of a dent you make in your principal loan balance you owe. A higher interest rate equates to you building less equity in your house each time you make a payment than you would if you had a lower interest rate.

(Even if you’re not a frosting/icing person, I hope you’re starting to see how it’s not just about the cake)

BTW…No, I’m not trying to get you to buy a house because,”Now is a great time to buy!” (courtesy of you-know-who). I’m just saying that you need to take purchasing power into consideration when deciding whether buying a home or “moving up” is right for you or whether you should just continue renting or stay where you are.