6 Financial Reasons for Homeownership in Raleigh, North Carolina

March 23, 2022 by Kevin Martini

Homeownership has so much to offer financially but it can also positively impact your life today and impacts future generations too! Raleigh Mortgage Broker and Certified Mortgage Advisor Kevin Martini published a special episode of the Martini Mortgage Podcast highlights 6 Financial Reasons for Homeownership.

financial reasons for homeownership raleigh mortgage lender logan martini

Raleigh Homeownership Provides Leverage

Leverage is the use of borrowed money to increase your return. Housing is one of the only leveraged investments available today.

Raleigh Homeownership Locks In Your Housing Costs

The only way one can escape rising rents is to consider purchasing a home and locking in your monthly housing payment with a fixed rate mortgage payment.

Raleigh Homeownership Is Usually A Form Of Forced Savings

Every month when you write the check for your mortgage you are not only paying interest, you are also paying principal.

Raleigh Homeownership May Provide Substantial Tax Benefits

If you itemize your taxes you may be able to deduct the mortgage interest you pay on your Federal taxes and State and Local Taxes (SALT) may also be tax deductible on Federal and State taxes too.

Raleigh Homeownership Provides Protection From Inflation

Owning a home is typically a hedge against inflation.

Raleigh Homeownership Provides Non-Financial Benefits

When considering to buy a home you need to to have price and cost clarity of the the dollars and cents but you cannot forget to weigh the non-financial benefit that could truly change your life.

It is never too soon or too late for homeownership

It is never too soon to explore your homeownership options…it is never too late to explore your homeownership options either. If homeownership is right for you and your family then know this…the first step is always the loan not the home.

There is never a substitute for having price and cost clarity before you start looking for a home. Get pre-approved before your home search not just pre-qualified! To a seller a pre-qualification says you are just ready and willing whereas a pre-approval with a Certified Mortgage Advisor with the Martini Group says you are ready, willing and able. It also communicates to the seller you are making a ‘same-as-cash’ offer and that is important to share in any market, especially in a tight real estate market like we are in today.

If you want trusted advice with a digital mortgage process that offer a great rate call either Logan Martini or Kevin Martini with the Martini Mortgage Group.

martini mortgage podcast best raleigh mortgage broker kevin martini financial reasons for homeownership — 6 Financial Reasons for Homeownership

There is nothing wrong with renting. In fact there is a time to rent however that time is not now. Do not fret, I am going to unpack this bold statement in a few moments in this special episode of the Martini Mortgage Podcast.

Welcome and thank you for tuning in, my name is Kevin Martini and I am not just the host of the Martini Mortgage Podcast, I am also a Certified Mortgage Advisor with the Martini Mortgage Group which is located in downtown Raleigh, North Carolina. We may have our headquarters in North Carolina however myself and my crew help families all over the U.S. create generational wealth with financing real estate.

Episode 135 is called – 6 Financial Reasons for Homeownership you could also call this episode 6 reason to buy a home in Raleigh or anywhere city in North Carolina or any city in the U.S. for that matter.

Now let me share, recently I was a the grocery store buying my Cocoa Pebbles, yes – – – you know he cereal, and yes, it turns the milk chocolate. Any who, I heard someone say:

‘Excuse me Mr. Martini’

…I immediately got excited because I thought my dad was in the cereal aisle at the grocery store with me but then I realized the chap was talking to me. I responded by saying…

‘I know I have been in the financial services since the mid 80’s however I am just Kevin, my dad is Mr. Martini’

The young man’s name was Stephen and he is a younger millennial an he asked me if he should buy a home now or wait. My response was not yes not no — it was, ‘it depends’.

I know what you are thinking, I should of just said ‘ yes you should’ but if I did that it would be wrongs. You see no one on YouTube, no one on Facebook or Instagram and no one on a Mortgage Podcast or any podcast for that matter and most definitely no mortgage app that can take you to the moon on a rocket can tell you if it is a good, or a smart idea for you to buy a home. Homeownership is right for many but not all. You see, every family I have the privilege to work with is different. There is not a cookie cutter response to Stephen’s question.

Think about this for a moment…getting a mortgage is a big deal, it is a financial instrument just like a stock or a bond that you may buy in your portfolio. You would never buy a stock without making sure it properly fit into your portfolio, would you? You should not just buy a house because someone says you should…everyone is different.

Listen, if you are looking for someone that who just peddles mortgages, then hit the stop button because this is not me! Again, for many, buying a home makes sense — for some it does not. This is something I can help determine when we first connect together. With an open heart, in order to create generational wealth, one needs to own real estate. If homeownership is right for you taking action sooner than later could save you tens of thousands.

Now if buying a home is right for you and your family then I want to share some of the financial benefits associate with buying a home and getting a mortgage with the Martini Mortgage Group with PCL Financial. In this episode, episode 135 of the Martini Mortgage Podcast, I am going to share 6 Financial Reasons to Buy a home.

Are you ready? Let is start making this mixing this cocktail.

Number 1 is leverage.

Housing is one of the only leveraged investments still available today. Simply put, leverage is the use of borrowed money to increase your return. To illustrate let us assume that you want to buy a home in Raleigh and home is priced at say $500,000 and you have twenty percent saved. For this that are not quick with math, 20% of 500,000 is 100,000.

So let us look at the transaction in detail…You would buy the home for $500,000 and you would put 20% down, that is $100,000 and you would get an epic mortgage rate on your $400,000 mortgage with me, Kevin Martini, your Certified Mortgage Advisor.

Now let us fast forward say 1-year…in other words, you own the home and you secured the mortgage and you are moved in and lived there for 12-months. For purpose of conversation, let us assume the home appreciation is 5%.

This $500,000 home you purchased just 12-months ago is now worth $525,000. Assuming this is your only asset, your net worth is now $525,000.

Now think about this, let us say you did not buy a $500,000 home in Raleigh and let us assume that you purchased a one-hundred thousand dollar home for cash in Raleigh 12-months ago. Using the same 5% appreciation in the previous example, then your net worth would be $105,000. Make sense so far?

OK, what does it mean? With leverage you made $20,000 more!

Let me share a quote from the Joint Center for Housing Studies at Harvard University on this topic…and I quote:

“Homeownership allows households to amplify any appreciation on the value of their home by a leveraged factor.” End quote.

The Number 2 of 6 financial reason of homeownership is crazy simple and so very obvious but many people miss it.

You are paying for housing whether you own or rent.

Here is a fact, when you rent you are paying for a mortgage, you are just paying your landlord’s mortgage for them.

For the people that were multitasking let me say it again,

when you rent you are paying for a mortgage, you are just paying your landlord’s mortgage for them.

I mentioned earlier that there is nothing wrong with renting and there is a time to rent and that time is not now in my opinion. Census data shows the median monthly rent continues to go up year after year, in fact, since 1988 it has just gone up and up and up. The only way one can escape rising rents is to consider purchasing a home and locking in your monthly housing payment with a fixed rate mortgage payment. I truly believe that homeownership is a much more stable long-term investment.

Perhaps your concern is credit score or that you are self-employed or maybe it is the down payment required.

On the topic of credit score, I think you will be shocked to know that there are home loan solutions that the Martini Mortgage Group offers families that have experienced a bump and a bruise in the past. I get it, bad things happen to good people and the the bad thing that you have moved passed does not need to prevent you from owning a home.

Perhaps a limiting belief is that you are self-employed…many of the families I work with was a Certified Mortgage Advisor are self-employed and they have a very creative accountant. This week, my business partner and fellow mortgage strategist, Logan Martini helped a self-employed person to qualify for a mortgage just using his bank statements for the last 24-months and we did not even look at his tax returns.

Another concern is downpayment, there is a common misconception in the marketplace that one needs to have a 20% down payment to buy a home. One does not need to make a 20% downpayment to secure a home loan. With with the Martini Mortgage Group there are low and no down payment mortgage solutions that we offer.

Remember you are paying for housing whether you rent or own. For me, if I am paying for something, I want to own it. Please do not let myths about credit score or downpayment or the fact that you are self-employed stop you for exploring your options. I said it earlier, homeownership is not right for everyone and it may or may not be right for you however you owe it to yourself and your family to see if it is right for you.

Let me extend an invitation to you, if you would like to have a confidential conversation with me, I am here, just go to CallWithMartini.com to get access to my schedule and book a time for us to connect or if you prefer, call me by dialing 919.238.4934.

The third financial benefit is associated with the fact that owning a home I usually a form of forced savings. Let me breakdown forced savings.

Every month when you write the check for your mortgage you are not only paying interest, you are also paying principal. When you pay principal you are reducing the amount you owe.

Let me illustrate. If you purchased a $500,000 home and you put 20% down and for example let us assume, for illustration only a 4% rate for with a 30-year fixed mortgage, just like the example we talked about earlier when we were discussing that housing is one of the only leveraged investments still available today.

In this example your Principal and interest would be, $1,909.66 a month. Every month when you make a mortgage payment you are retiring your debt every month.

In this example, you are making a forced saving deposit of $576.33 a month. In this example you are making a forced saving deposit of $6,915.96 a year.

There may be substantial tax benefits to owning a home and having a mortgage is the 4th financial reasons to buy a home

A unique financial reason to buying a home is if you itemize your taxes you may be able to deduct the mortgage interest you pay…assuming you are in a twenty eight percent tax bracket and for illustration ONLY, this would mean the month tax benefit for that $500,000 home we have been discussing would be $373.33 a month. The annual tax benefit would be $4,479.96.

When you rent there is no tax benefit nor ability to write off your rent on your Federal or State taxes however do not fret, your landlord most likely will get the benefits and I am sure your landlord is thankful you are participating to their forced savings.

Inflation is the 5th financial reason for homeownership and to buy a home.

Owning a home is typically a hedge against inflation.

Let me define inflation…inflation is a general increase in prices and a fall in purchasing value of money. At the time of this recording inflation is at a 40-year all-time high.

Housing costs and rents have tended over most periods of time to go up higher than the rate of inflation and for this reason owning a home is an attractive proposition because it provides a hedge against inflation.

Finally, the 6th financial reason for homeownership is the non-financial benefits of homeownership. I know it is crazy to say that a non-financial benefit is a a financial benefit but it is and sadly many people overlook the the feeling of gratitude, security, pride and comfort that homeownership offers.

When considering to buy a home you need to to have price and cost clarity of the the dollars and cents but you cannot forget to weigh the non-financial benefit that could truly change your life.

Let me wrap this special episode of the Martini Mortgage Podcast up with a recap the 6 Kevin Martini financial reasons for homeownership.

Number 1 , housing is one of the only leveraged investments still available today.

Number 2, when you rent you are paying for a mortgage, you are just paying your landlord’s mortgage for them.

Number 3, owning a home I usually a form of forced savings.

Number 4, there may be substantial tax benefits to owning a home and having a mortgage.

Number 5, owning a home is typically a hedge against inflation.

Number 6, homeownership provides non-financial benefits.

In closing, getting qualified and ultimately approved for the right home loan and getting mortgage for your home is NOT like shopping for the lowest priced gas for your car.

Listen, every mortgage company secures the money from the same source so everyone at the end of the day has the same mortgage rates however not everyone provides trusted advice with a secure digital mortgage platform that provides certainty like the Martini Mortgage Group provides. In addition, our job is not done after closing since it is our obligation, duty and responsibility to manage your mortgage for you after closing.

Thank you for tuning in to episode 135 of the Martini Mortgage Podcast which was about the 6 Financial Reasons for homeownership.

Thank you in advance for sharing this episode with someone you care about that may benefit from its contact.

If you want trusted advice with a digital mortgage process that offer a great rate with certainty check out my website by going to: www.MartiniMortgageGroup.com – you can find some real world information in the learning center and you can also securely apply online or book an appointment with me.

Now it is time for the disclaimer:

This material has been prepared for marketing purposes only. This is not a loan commitment or guarantee of any kind. Loan approval and rate are dependent upon borrower credit, collateral, financial history, and program availability at time of origination. Rates and terms are subject to change without notice. The Martini Mortgage Group at PCL Financial is a division of Celebrity Home Loans, NMLS # 227765 with a Branch address of 507 N Blount St Raleigh, North Carolina 27604. You can contract Certified Mortgage Advisor and Producing Branch Manager, Kevin Martini NMLS# 143962 by calling the Branch and that number is 919.238.4934. For a full list and more licensing information please visit: www.NMLSConsumerAccess.org or by visiting www.MartiniMortgageGroup.com – Equal Housing Lender

How the Fed Impacts Raleigh Mortgage Rates

March 20, 2022 by Kevin Martini

2.9 Trillion - is the amount of mortgage bonds the Fed has purchased since March 2020. The Fed plans to reduce its bond holdings in the coming months which could drive up mortgage rates.

This is a Special Report by Raleigh mortgage lender and Certified Mortgage Advisor Kevin Martini on how the Federal Reserve impacts Raleigh mortgage rates.

THE FED IMPACTS FIXED-RATE MORTGAGES BY BUYING AND SELLING MORTGAGE BONDS.

Raleigh interest rates on fixed-rate mortgages change whenever the Fed buys or sells mortgage bonds, and whenever the Fed makes statements about buying and selling mortgage bonds. Since the pandemic hit the economy in March 2020, the Fed has purchased an eye-popping $2.9 TRILLION of mortgage bonds, making it the biggest buyer of bonds in the market. This purchase of mortgage bonds by the Fed is what caused caused Raleigh interest rates to go down to record levels.

raleigh mortgage rates by kevin martini a raleigh mortgage broker

However, as you can see from the chart above, mortgage bond prices fell off a cliff in Q1 2022 when the Fed announced it would be scaling back its massive bond-buying program. When mortgage bond prices go down, mortgage rates go up. The average interest rates on fixed-rate mortgages went up by 1% + so far this year according to Freddie Mac’s weekly survey of mortgage rates.

I expect more volatility in mortgage rates as the Fed continues to release more details about when and how it plans to roll back its bond-buying programs and reduce its bond holdings.
Raleigh Mortgage Broker & Certified Mortgage Advisor, Kevin Martini

THE FED IMPACTS HOME EQUITY LINES OF CREDIT BY CHANGING THE “FED FUNDS RATE” NOT MORTGAGE RATES.

Raleigh interest rates on home equity lines of credit (a.k.a. HELOCs) change whenever the Fed lowers or increases the “Federal Funds Rate.” That’s because HELOCs are based on the Prime Rate and the Prime Rate is based on the Fed Funds rate. The Fed increased rates in March 2022 for the first time since 2018 and indicated more rate hikes are on the way. This means that rates on home equity lines of credit are likely to increase significantly by the end of 2022.

WIth the projected increase in HELOCs cost, one should consider refinancing the balance into a new first fixed rate mortgage and lock in their housing costs.
Raleigh Mortgage Broker & Certified Mortgage Advisor, Kevin Martini

Credit cards, personal loans, student loans, auto loans and business loans are directly impacted when the Fed raises rates

MARTINI MORTGAGE GROUP TOP 3 RISKS TO RALEIGH HOME LOAN RATES FOR THE BALANCE OF 2022

Inflation

The nemesis to a bond is inflation because inflation erodes the bonds return. Right now, bonds are trading at negative yields relative to inflation. For example, if a bond investor is earning 3% and the inflation rate is 7%, the investor is losing 4%. At some point, it seems likely that bond investors may demand higher yields in order to account for higher inflation. This could drive up Raleigh interest rates even higher.

The Federal Reserve

The Fed has injected an eye-popping $4.516 Trillion into the economy since March of 2020 by buying Treasury bonds and mortgage bonds. 2.9 Trillion of the 4.516 Trillion of stimulus was mortgage bonds. This infusion caused Raleigh mortgage rates to go down to record levels. As the Fed unwinds the mortgage bond purchases, many economists are anticipating that Raleigh home loan rates will rise significantly.

Good News vs. Bad News

As a primer, news impacts Raleigh mortgage rates. On the aggregate, when negative news about the economy hits the wires, investors flock to the bond market for safety, driving down interest rates. When positive news hits the wires, investors shift their bias toward stocks and away from bonds, causing interest rates to go up. Many economists are anticipating that the economy will remain strong in 2022 however with geopolitical events and unwinding of the 2.9 Trillion of mortgage bonds, it is likely that Raleigh home loan rates may go up as a result.

Let’s Chat About Raleigh Mortgage Rates and How You May Benefits from Buying a Home Or Refinancing Your Current Home.

If you have question about this article, if you have questions about buying a home as a first-time homebuyer or as a repeat homebuyer, if you have questions about refinancing your current home loan, simply call the Martini Mortgage Group at PCL Financial by calling (919) 238.4934.

Why This Spring 2022 Is The Time To Buy

March 6, 2022 by Kevin Martini

Are you thinking of buying a home in Raleigh? Are you thinking of buying home in North Carolina or anywhere in the U.S. for that matter? If so, spring 2022 is a great time to make your home purchase as a first-time homebuyer or as a repeat homebuyer. Here are Certified Mortgage Advisor, Kevin Martini’s to motivators this season that should confirm and encourage you to start the home buying process sooner than later.

Homeownership Has Many Perks

Homeownership is the American dream – not just because of the wealth of tangible financial benefits, but because of the intangible benefits too! Homeownership has the power to change lives for generations.

Homeownership has far reaching impacts way beyond just stability and security. Over the past two years, the evil pandemic made having a safe space to call home more important than ever before. If the pandemic has changed what you’re looking for, homeownership may be able to deliver the perks you deserve, financially and emotionally.

More Homes Are Expected To Enter the Market This Spring

This spring there are many active buyers in the marketplace than there are homes for sale, the homebuying process may take more time and effort than usual. It is what it is, however the good news is, spring is typically a highly active season in the real estate market when more sellers list their houses.

If you believe homeownership is right for you and your family, it is time to get confirmation so you have certainty. The first step to homeownership is not the home search, the first step is the home loan. In any real estate market and regardless if you are a first-time homebuyer or a repeat homebuyer, there is never a substitute for having certainty before you start your home search. Certainty for yourself, your family and for the seller too. You should never get just pre-qualified you should only get pre-approved with a Certified Mortgage Advisor with the Martini Mortgage Group. A pre-approval with the Martini Mortgage Group provides you with not just price and cost clarity but it provides you with certainty that when your dream home hits the market, you can do it. It also communicates to the seller of your dream home that you are making a ‘same-as-cash’ offer.

Home Prices and Mortgage Rates Are Climbing

In 2021 the housing market saw a sharp increase in home price appreciation due to unprecedented demand and the imbalance of housing supply – this is especially true for people looking in the Raleigh, North Carolina market. 2022 is expected to be a rinse and repeat of 2021 even with the rise of inflation and mortgage rates. Yes, mortgage rates are higher right now then they were last year and next year they will likely be higher than they are today however, from a historical standard, they are still very low.

With the ‘sticky’ vs ‘transitory’ nature of the current inflation today and based on the known fact that homeownership is a hedge against inflation then pepper in the expert predications that home loan rates will keep rising in 2022, this means if one waits to buy a home, waiting will cost them more.
Certified Mortgage Advisor Kevin Martini

Rents Are Rising

Home loan rates and home prices aren’t the only things on the rise either. Census data also shows the median monthly rent continues to go up year after year. If you want to escape rising rents, consider purchasing a home so you can lock in your monthly mortgage payment and avoid future increases. Even though the number of homes available for sale is low, homeownership is a much more stable long-term investment.

The first step to homeownership is not the home search – the first step to homeownership is the home loan. It is never too soon to connect with the Martini Mortgage Group to have a free confidential conversation. Simply call: (919) 238-4934.