• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Sonoma County Mortgages

Contact Us About Mortgage Financing

All financing provided by New American Funding

(707) 217-4000 | Prequalify Now

Search Sonoma County Mortgages

  • Home
  • Purchase
    • How Much Down Payment To Buy A Home?
    • How Much Income You Need To Buy A Home
    • How Much Should I Save For Buying A Home?
      • How Rates Affect Payment
    • No PMI Mortgages
    • FHA Loans
    • Sonoma County Disaster Loans
    • Jumbo Loans
  • Refinance
    • Mortgage Rates
    • Does It Make Sense To Refinance?
      • Get Your Refi Paperwork In Order
    • How To Pay Off Your Loan Faster
    • How To Remove PMI
    • How Lenders Price & Quote Loans
  • Loan Programs
  • Payment Calculator
    • Mortgage Affordability Calculator
  • Blog
  • Videos
  • About SCM
  • About Scott Sheldon

Primary Sidebar

Sonoma County Mortgages is a part of New American Funding

New American Funding - NMLS #6606

Get Your Latest Rate Quote Now!

Is the mortgage rate or the purchase price you pay for a home more important?

November 13, 2022 by Scott Sheldon

Share on Facebook Share on Twitter Share on Pinterest Share on LinkedIn Share on Email
purchase or rate to buy a home

If you’ve been thinking about purchasing a home and you’ve been on the fence because you’re just not sure about the right time, the information that’s going to follow is for you…

Trying to time the market to identify a moment in time to pinpoint the right time to purchase a home is an incredibly challenging endeavor indeed. It’s equivalent to trying to locate a needle in a haystack. A better more pragmatic scenario would be to look at your cash, credit, and income and decide to purchase a home based on your household budget.

It boils down to your income, monthly expenses, and having a good foundational financial framework so you can make an informed decision. If all of those are in place how do you determine what’s more important purchase price or interest rate? As interest rates continue to move higher your competition goes away. Rising interest rates remove your competition. If you’re desiring to make an offer to purchase a home and your competition is little to nonexistent you have all the cards, and you hold all the power which allows you to negotiate a fair price for the home. After all, who wants to overpay for a home?

How do we know you will not overpay for the home? Its amazingly simple interest rates drive competition.  Put another way because interest rates are so high many are sitting on the sidelines waiting to see what the market does.  That’s good news for you as a smart and savvy homebuyer because it allows you to negotiate the purchase price of the home. Negotiating a purchase price reduction of $50kto 100k in this environment is not out of the question.

Say for whatever reason you’re concerned about the market and housing prices coming down, well in most markets’ rents are still in hot demand. On the flip side, we all know this environment with interest rates is not sustainable and long-term mortgage rates will come down. When interest rates come down borrowing power increases, when borrowing power increases, your competition will increase. More people will be after that same house at 6% or a 5% mortgage rate than they will at a 7% mortgage rate. That’s just a hard fact. So in other words your $600,000 home today at a 7% 30-year fixed rate mortgage very easily could be a $650,000 or a $675,000 home or more at a 6% mortgage rate assuming interest rates come down.  The notion housing prices are going to come down because of high-interest rates is highly unlikely as rents continue to soar, long-term fixed rates are poised to fall, and the supply of homes remains low.

Think of it like this if you purchase a home today you can always trade out the mortgage rate for something more favorable when rates come down in the future. The way you should look at it as an informed homebuyer should be something like this a 6.75% mortgage rate today for example could very easily be a 5.75% mortgage in 12 months and a 4.75% mortgage in 24 months. Using a $600k purchase price for the example above that’s going to translate to somewhere around $800 in lower mortgage payments to you when interest rates come down via subsequent refinancing opportunities. Waiting to see what happens in the future might make sense if there is any concern about your credit, your down payment, or your cash. If those elements are in place and you have the goal of buying real estate and holding onto it for a few years more than likely you will end up doing very well for yourself over the big picture.

 

If you’re thinking about purchasing a home or want to get a home-buying plan created for you and your family start today by getting a complementary mortgage rate quote.

 

Related Mortgage Advice from Scott Sheldon

  • How much of your income should go towards a mortgage payment
    How your mortgage payment changes per every $100,000 in purchase price

    One of the questions home buyers have when house hunting is the relationship between their…

  • 2017 mortgage rate environment
    The 2017 Mortgage Rate Environment

    The mortgage industry has gone through some changes in the last three months. If you…

  • What Santa Rosa mortgage can I use to purchase an income property?

    This depends if you meet the eligible requirements to purchasing an investment property. The best…

  • FHA Home Loans: Mortgage Insurance Premiums Set To Rise!

    Thinking about purchasing or refinancing using the Sonoma County mortgage? If yes, the mortgage insurance…

Filed Under: Uncategorized Tagged With: BAD CREDIT MORTGAGE, buying your first home, conventional mortgages, FHA Loans, home buying, how to buy sonoma county real estate, Low Rates, mortgage comparison shopping, mortgage lender

Get Sonoma County Mortgages News and Updates in Your Inbox

Footer

SCM on Facebook

SonomaCountyMortgages.com

Connect on Facebook

SCM On Instagram

Follow Sonoma County Mortgages on Instagram

Follow on Instagram

SCM on Zillow

Zillow Reviews for Scott Sheldon, New American Funding

See Reviews on Zillow

Location & Contact

Sonoma County Mortgages and New American Funding are an Equal Opportunity Housing Lender

Scott Sheldon, Senior Loan Officer
NMLS ID# 287389
2455 Bennett Valley Road C107
Santa Rosa, CA 95405
1-707-217-4000
View SCM Map | Email Us!

Map of Sonoma County Mortgages New American Financing Office

View Map on Google

Copyright 2010–2023 SonomaCountyMortgages.com · About Us · Sonoma County Loans · Privacy Policy · Terms Of Use · Legal · Site Map

NMLS Consumer Access © New American Funding. All rights Reserved. NMLS ID#6606.
Corporate Office 14511 Myford Road, Suite 100, Tustin, CA 92780. We at New American Funding take great pride in our customer service and make it our number one priority. We encourage you to contact us for complaint resolution or any post-closing questions you may have regarding the servicing of your loan. We strive to have your experience with New American Funding a stellar one. In the rare case that our service did not meet your expectations, please call our customer care hotline at 1-800- 450-2010, ext. 7100 or you may contact us by email customerservice@nafinc.com. Please leave a detailed message and we will follow up with you no later than the end of the next business day. If you are using a screen reader or other auxiliary aid and are having problems using this website, please call 800-450-2010 Ext. 7100 for assistance.

State Licensing (Opens in New Window) | Privacy (Opens in New Window)
Terms of Use (Opens in New Window) | Electronic Consent Agreement (Opens in New Window)
Opens in new window Opens an external site Opens an external site in a new window