Buyers - Do You Know About Rate Buydowns?

  There’s no doubt that buyers have a little more say in the real estate market today than they did just even a few months ago. Increasing inventory levels and longer days on market are giving buyers options and time to make purchasing decisions, and sellers are more willing to give concessions to make their home more competitive.    So why aren’t buyers out there scooping up all the available inventory? Higher mortgage interest rates are impacting affordability on top of already record-breaking prices for many would-be buyers and consequently cooling off demand in today’s market. Rates reached a 13-year high in July at 5.8%. To give perspective, they were at 2.87% the same time last year. Luckily, rates took a dip this week to below 5% for the first time since April 2022. This change is a welcome one to buyers who were possibly priced out of purchasing or disqualified from obtaining a loan due to escalating interest rates. With the Federal Government actively increasing their benchmark rates to combat inflation, we may just see them on the rise again. Because of this, buyers need to know other options that can help them obtain their goal of homeownership.   Enter the Rate Buydown.    What it is: A rate buydown is a mortgage financing technique to help buyers qualify for a mortgage loan and receive a reduced interest rate for a lower monthly payment by making a lump sum payment up front. The lower rates are typically effective for the first couple years of the mortgage loan life, and then increase to the standard rate over time. Some are effective for the entire life of the mortgage loan. Different lenders approach rate buydowns differently and may not offer them to everyone. It’s important to shop lenders to obtain the best rate and best program that works for you.   How it works: A buyer can decide to conduct a rate buydown on their own, but we've seen sellers pitch in on them as a concession instead of agreeing to a price reduction. During negotiations of a property sale, sellers can agree to essentially subsidize a portion of the purchase price on behalf of the buyer by buying a discount or points on the mortgage loan via a lump sum payment. That payment to buy mortgage points reduces the interest rate and leads to a lower monthly payment for the borrower.    The cost of mortgage points is based on the size of the loan, with one point representing 1% of the mortgage. For example on a $800k mortgage loan, one point would equal $8,000, two points would equal $16,000, and a half point would equal $4,000. In the chart below, you can see how increasing the points creates significant cost savings in the monthly payment and over the course of the loan compared to a reduction in the purchase price.     Who it Benefits: This technique can be impactful for borrowers who would need the extra savings in order for a home purchase to make financial sense at that point in their life. Some borrowers may anticipate increases in their income over the years, so a rate buydown can be an opportunity to make a purchase now, and be able to keep up with the increased payments later on.   The Pros of a Rate Buydown: Temporary or permanent reduction in monthly payments Ability to obtain a mortgage loan Helps offset the cost of increasing mortgage rates and housing prices   The Cons of a Rate Buydown: Initial upfront cost may not be doable for some borrowers If income doesn’t increase to match the higher interest rate (or a 3-2-1 or 2-1 structure), the borrower may not be able to make the monthly payments   We recommend reaching out to your favorite lender(s) to learn what a rate buydown can look like for you.          Data provided by Synergy One Lending Monica Davis, Branch Manager NMLS: 92376 Phone: (208) 863-5985 Email: monicadavisteam@s1l.com 

View more

Take a Dip: 5 Homes for Sale in Boise with Pools

  Need something refreshing from the heat? Take a quick dip and explore these 5 Homes in Boise with Pools. The best part? They are all available for sale and ready to enjoy for the rest of summer.   1560 E Nines Point Lane This luxury poolside setting is complemented by extraordinary downtown Boise views. This expansive resort-like setting includes a crystal clear lap pool, reflection pool with waterfall, and hot tub to enjoy the water with a backdrop of twinkling city lights. See More   5131 N Corralero Lane The way this property is situated in the foothills gives the pool an infinity-like effect where the sparkling blues roll into the city skyline. This remarkable backyard is made for outdoor parties, with a massive covered patio, large pool with sun shelf, fire table, and hot tub.  See More   1236 E Candleridge Drive If walls could talk, they would tell of the stories of cocktail parties and midnight dips in this groovy home. The incredibly private backyard features a uniquely-shaped pool and the cherry on top? A pool cabana with a bar (ready for a beer tap too!) See More   570 & 590 S Cole Road The only home on this list with an indoor pool, this home is a blast from the past. This architectural marvel is impressive in itself, but the year-round pool feature makes it an absolute standout in Boise. See More   3101 W Teton Street This beautifully renovated brick home in Boise's charming Depot Bench area has a cool surpise in the back, an in-ground pool and sprawling grounds. There's plenty of room for gatherings big and small here, and the neighborhood is rich with nostalgia. See More    - Honorable Mentions - These homes may not have a pool on site, but even better, they have access to one without having to worry about the maintenance. Check out these properties that have community pools. View List of Homes    

View more

Boise Real Estate Summer 2022 Conditions

It’s time to adjust the sails, the winds of change are here. The impact of a down economy and the efforts of the Federal Reserve to manage inflation has rippled into Boise real estate.   What we’re seeing: Inventory has increased 192.9% YoY Home sales are down 16% YoY Mortgage interest rates are double what they were this time last year Price reductions are a daily occurrence And… median sales price is still up 12.8% YoY*current market stats from July 1, 2021 to July 1, 2022   These metrics are trending to a normal and balanced market. After we all got used to Boise real estate breaking record after record over the past 2 years, this change seems like a stark one… doesn’t it?  It is taking extra thought for realtors, buyers, sellers and homeowners to acclimate to the adjustment from an extremely undersupplied market (with prices escalating at unprecedented rates) to entering back into a “normal” market. It has become difficult to decipher the media's headlines, with the sound-bites not providing the full picture. Most interestingly, the median sales price still remains significantly above the same time last year, and year-to-date this year. That's incredibly positive news for sellers and homeowners that we're not seeing in the headlines. Remember the days when a home would sit on the market for 30, 45, 60 days and get 1 offer? That was normal. This type of market may seem like something from yesteryear, but it also feels like a much healthier and less stressful market to buy or sell in.    What this means for buyers: Better selection and more options to choose from More time to make a buying decision Mortgage loans are more expensive   What this means for sellers: Expect longer days on market Expect more competition Effective pricing is key   We are all feeling the aftershock of an exuberant market, and now it's time to take things a bit slower. Now, more than ever, sellers are leaning towards the expertise of knowledgeable Realtors® to make their home stand out among the rest. Buyers are taking a bit of reprieve, but need to move quickly to lock in mortgage rates while they are still low.  

View more