5 WAYS to BUY YOUR DREAM HOME when prices are Through the roof

It’s the word on everybody’s lips… no, not “pumpkin spice”… Inflation!

The August 2023 Consumer Price Index (CPI) rose 0.6 percent to 3.7%, making it the second consecutive uptick this year, following 12 months of steady decreases since last summer.

Despite this small increase though, inflation is a long way from it’s 9.1% peak in June 2022.

Good news right?

Not so fast.

When we break things down a little further we find that “shelter”, including housing costs, remains one of the categories impacting this overall increase most significantly, having increased for 40 consecutive months and showing a rise of 7.3% in the last 12 months alone. And that trend doesn’t look likely to change anytime soon.

So what does this mean for buyers and sellers?

Sellers? I don’t think you need us to tell you that this is an opportunity to get a good price on your home

Buyers? It’s a little more complicated.

We aren’t going to bullshit you. Low inventory, rising prices and high mortgage rates don’t paint a pretty picture.

However, that doesn’t necessarily make this a bad time to buy. It’s all down to your personal circumstances, goals and needs.

Remember that even when inflation comes down, that doesn’t mean house prices fall, it simply means they rise at a slower pace.

That means if a real estate investment is in reach now, not only are you likely to still be bagging a better bargain than future buyers, you are also not losing out on equity by waiting around.

Read on for our top tips on Buying in an expensive market:

1: SHOP AROUND

But not just for homes, for your mortgage lender too!

They may feel more convenient and familiar, but you don’t have to rely on your bank for your mortgage and often with fees often racking up the cost of borrowing, it may not be the best financial decision for you.

Do your research and look out for any non-bank or online lenders who sometimes offer great rates and no-fee products that can help you reach your goals.

2: LOCK IT IN

In a market like this, its a good idea to speak with your lender about locking in your rate to protect you from mortgage rate fluctuations and avoid being hit with sudden, scary hikes in your monthly payments just as your about to close.

Remember that locking in your rate does not stop you switching lenders so don’t let that misconception stop you!

3: Make it work for you

Inflation can also be your friend… that is if the cash you’re saving for your down payment is taking advantage of higher interest rates in a high-yield savings account!

4: SHUFFLING

Mortgage lenders take into account all your debt payments when assessing debt-to-income ratio so it can be wise to redirect some of your savings to paying off any higher rate debts (eg. credit cards or car loans) first. Whilst this will lead to a slight increase in your monthly mortgage payments, it should bring your total debt repayments each month down, boosting affordability.

5: Play the long game

Whether it’s investing in a “fixer-upper” or seeking out a bargain in an “up and coming” area, there are ways to save your hard earned dollars if you’re willing to have some patience.

Have your say…

Buyers? Sellers? What are your thoughts?

Let us know in the comments.