Want to buy a home? You’re almost punished for having the thought right now. Interest rates increasing, inflation, skyrocketing home values and more have made this one of the most challenging times for someone looking to buy a home.
Rent to Own Combats Interest Rate Hikes
Throw in a shortage of inventory and it’s easy to see why people are stuck paying high rental rates. Interestingly enough, it was not the increase home prices or even the low inflation that stopped people from buying homes, it was the increased interest rates.
Why Are Interest Rates Going Up
When the economy gets on a roll and really starts firing on all cylinders a new problem comes up, things get too expensive. If the costs of goods and services continue to go up, businesses will no longer be able to afford to pay their employees a reasonable wage, meaning people can no longer afford to pay for the cost of living in their area and the next thing that comes is a market collapse. To keep this from happening, the cure, unfortunately, is to utilize increased interest rates which will slow down the interest of buying which will eventually lower the prices. Many interested in buying a home have seen prices go down in recent months, but not enough.
A Tough Sell For Buyers
Buyers now have to have a credit score over 700, at least 20% cash for a down payment, income that proves they can cover the monthly mortgage costs and not exceed a percentage of that monthly income, insurance challenges, increases in property tax costs, increases in utility costs and homes are also now twice what they were ten years ago. Adititionaly, he increased interest rates alone can cost you tens of thousands of dollars extra on the mortgage. Sure you want to buy a home?
How To Flip The Script
Some buyers have decided to flip the script on the idea of just buying a home and are now looking for new and creative ways to work out deals for the property they are interested in. Rent-to-own deals offer a variety of benefits for buyers, especially in times when interest rates are through the roof. The monthly costs will be more affordable than rent in the area, does not include interest and also allows you to bypass several additional expenses and challenges of buying. The best part, market fluctuation like the ones we are currently seeing make it the perfect time for sellers to also consider rent-to-own deals.
Understanding your options based on the current and potential economic status is important to making the best decisions. If you can get the home you want and save over $100,000 on interest, cut through the hassles and red tape and move in faster, rent-to-own is what you need to look into. This strategy removes so many of the challenges that come with purchasing a new property and also offer the seller long-term income options. Additionally, if wear and tear on the house proves to be too much or the agreement is ended prematurely for any reason, the seller is free of their commitment and the buyer still owns the property, even years down the road.
