Trace Says Its a Good Time To Buy!
A reader wrote in:
I thought Urban Living’s readers might get a kick out of this note from Trace’s sales department. I admire their optimism, but they’re going for a Pulitzer Prize in chutzpah with their message: rates are down thanks to mortgage-related bank collapses, so you should borrow more money!
Here’s the email:
We hope that this finds you well and enjoying these last days of summer. It is likely that you’ve heard recent news about the Federal Government’s take over of the troubled Fannie Mae and Freddie Mac. At Trace we help you keep up with current events, share industry rumblings, and work in partnership with our lending partner, Mark Anderson at Wells Fargo, to bring you information to help you make your purchase at Trace more valuable.
What happened? An overview. Last week, the Federal Government took control of the troubled Fannie Mae and Freddie Mac, which together buy and trade almost half of the mortgages in the U.S. The takeover’s objectives include stabilizing and returning these entities to solid business operations.
Many financial experts believe that the move to intervene Fannie Mae and Freddie Mac was needed to secure financial system stability as the two enterprises were suffering from the market’s downturn. Without intervention buyers would continue to see the disappearance of affordable loan programs, such as those with lower down payments. Currently lenders are increasing down payment minimums and requiring higher credit scores, making qualifying difficult, and limiting the number of homes being purchased.
What does this mean to you, the home buyer?
* In the short term, interest rates have already dropped! Average 30-year fixed rates went from 6.35% to 5.93% – nearly half a point drop.
* With interest rates easing, we may see home prices stabilizing and building positive equity as more homebuyers are able to purchase.
* Even with tightened credit standards, many financing options for the home buyer remain available.
How can you benefit now?
The current financial state of the mortgage market actually foretells higher interest rates in the future; projections predict that rates could rise almost a whole point to 6.85% by the end of the year.
Current lower interest rates maximize your purchasing power at Trace now.
For example, Trace North #212, a one bedroom living space, is priced at $285,000. At an interest rate of 6.85%, the resulting monthly principal and interest payment is $1,680.
With the current rate drop, you could upgrade from a one bedroom to Trace North #414, a one bedroom with den, priced at $315,000 for the same payment. You’ve effectively increased your purchasing power by $30,000. Recent market changes, together with government action, have opened a window of opportunity for buyers. The takeover of Fannie Mae and Freddie Mac, just made purchasing at Trace more affordable for you.
Over the long term, as current buyers take advantage of these opportunities, the demand for real estate in job centers like Seattle will increase, which in turn will decrease the supply of in-city homes. Now is the time to grab your living space at Trace!
As always, we are here at Trace to be of service to you. If you have any questions or would like to take a closer look at your personal financial situation, please give us a call at 206.404.LOFT or email us at [email protected].