Earlier this week, the Federal Reserve raised the Federal Funds rate by one-half of a percentage point. That puts the current rate between 4.25% and 4.5%. Now, the Fed’s rate does not directly correspond to mortgage rates. As of the writing of this post, Freddie Mac shows interest rates for a 30-year, fixed-rate mortgage at 6.31%. In fact, they have steadily declined since early November. And financial experts, like Paul Zgalich with Guaranteed Rate, believe that mortgage rates may continue to decline into next year. But does that mean Jersey Shore home buyers should wait until Spring to start their house hunt?
Jersey Shore Home Buyers: Buy Now or Wait Til Spring?
Paul believes that interest rates are bound to be lower in the spring. And that may sound like buyers should pump their brakes on looking at houses now. However, that is not necessarily the case. While interest rates may be higher now, there is also less competition during the wintertime. When temperatures start to warm up, buyers come out of their houses and start looking for properties, especially at the Jersey Shore. So, even if the rates go down by one-quarter to one-half in the spring, buying a home now means that you might get a better price for it. (Competition can drive up prices.) Besides, you can always refinance if rates go down by quite a bit in the next 12 to 18 months. “Marry the house. Date the rate.” In other words, when you find a house you love, buy it now. But keep an eye on rates to see when a refinance is in order. And don’t forget to keep Guaranteed Rate’s “Lock and Roll Program” in mind when buying a Jersey Shore home.
Single-Family Home vs. Condo
Which option is better: a single-family home or a condo? It depends on what you feel comfortable with. Single-family homes offer larger properties. Condos rarely go larger than a two bed/two bath. You also get to exercise more control over your expenses and maintenance on a single-family home. Condo owners have to deal with a condo association board who decides how the property is managed. On the other hand, you get more amenities with a condo (fitness center, swimming pool, on-site security, etc). When it comes to financing, however, it is much easier to get a mortgage loan on a single-family home than a condo. Condo loans require more due diligence on the mortgage broker’s part. It also helps to have a REALTOR® on your side who knows how to handle condo sales. (Hint: that would be me!)
Sherri Lilienfeld, eXp Realty, Your Source for Jersey Shore Real Estate