- Buying a Home in 2021: A Step-by-Step Tutorial
- Government-backed mortgages give a better rate
- Low market handles are a sign of a weak economy
Buying a house in 2021: A step-by-step tutorial. For many immigrants residing in the United States, buy a house It is his American dream. Realizing this dream involves a process that must be followed advised by a team that has experience in the Real Estate market.
Another very important point to keep in mind to buy a home in 2021 is to get the lowest mortgage rate on the market to fit the estimated budget in the process of making that dream come true. Getting a low rate with a fixed-rate mortgage will prevent you from risking your rate going up with an adjustable-rate mortgage.
Government-backed mortgages give better rates
Mortgages that are backed by the US government are good options if you are eligible to apply for a home loan. But, it should be noted that you can find a 15-year average fixed rate of 2.44% and an average 30-year fixed rate of 3.30%.
We provide you with the national average rates for conventional mortgages, which can be what you think of as “normal mortgages.” Government-backed mortgages through the FHA, VA, or USDA may give you a better rate, since you’re qualified.
A mortgage can be considered as a fixed rate or an adjustable rate
In the process of acquiring a mortgage, you have the option of being able to consider a fixed rate or an adjustable rate. If, for example, you acquire a 15-year fixed mortgage, you will have a 15-year term to pay this mortgage, maintaining the same interest rate assumed from the beginning.
With a fixed mortgage, payments must be made monthly during those 15 years in which the agreement was made. It is good to clarify that the amount of these payments will be higher than if you took a 30-year mortgage, since you will have to pay the same value of the property in a shorter period.
Low rates: Sign of a weak economy
According to information published by MundoHispánico on May 13, the United States did not create as many jobs as expected in April, so the economy will not start quickly. Until then, which makes it possible to expect rates to remain low. Although the 15-year average fixed rate remained at 2.61% and the 30-year average fixed rate remained at 3.58%.
When rates are low they are often signs that the economy is weak and as the United States continues to face the economic consequences of the COVID-19 pandemic, rates in the market are likely to remain. low.
Timber shortage complicates the construction of new houses
Another situation that currently represents an obstacle in the purchase of a house within the United States is that there is a shortage of wood and this complicates the construction of new houses. Brant Chesson, President and CEO of Homes By Dickerson, a home builder based in Raleigh, North Carolina, said, “I’ve never seen anything like this.”
For his part, for CNN Business, Jaffrey Mezger, CEO of KB Home, commented: “While wood prices have risen, we have been able to pass it on to the consumer with higher prices for homes. And there is still much more demand than supply ”.
Fixed 15-year mortgages
If it is your decision to acquire a fixed mortgage for 15 years, you should know that you will have a period of 15 years to pay your mortgage. During this period of time, the installments will be kept at the same interest rate that you assumed from the beginning, making the monthly payments.
The amount of these payments will be higher than if you took a 30-year mortgage, since you will have to pay the same value of the property in a shorter period. However, the advantage is that the property will end up being less expensive if you cancel it in 15 years and this is because because it is a shorter period of time you will get a lower interest rate.
30-year fixed rate
When you acquire a property with a fixed mortgage for 30 years, you will have a period of 30 years to pay your mortgage during which the same interest rate that you assumed from the beginning will be maintained. However, keep in mind that a 30-year fixed mortgage usually has a higher interest rate than if you decided to pay it off in a shorter period of time.
The advantage of a fixed mortgage is that you will make smaller monthly payments than if you chose a shorter term. In a shorter term it would focus on value and the quota would increase. In a longer term, you will be able to divide the payments over more months. The downside is that the property will end up costing you a bit more because you will receive a higher interest rate than if you chose a shorter payment term.
Get low interest rate mortgages
Getting a low mortgage rate in the process of buying a home is every buyer’s wish. Although you do not have to run right away, because experts say that the rates to buy or refinance your home will remain low for a while longer due to the effects caused by the coronavirus pandemic on the economy.
On the other hand, if you feel ready or want to prepare to buy a home in the short term, we share four simple steps with which you can start organizing to get the right mortgage that will take you to the home of your dreams.