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Rising Raleigh mortgage rates impact on home prices

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During the first quarter of 2022 the average principal and interest payment on a $100,000 home loan went up by about $100 courtesy of rise in Raleigh home loan rates. It is expected that Raleigh mortgage rates will continue to rise in 2022 and what will the impact of higher mortgage rates be on home values in the Triangle of North Carolina?

In this special episode of the Martini Mortgage Podcast, episode 138, Certified Mortgage Advisor Kevin Martini, unpacks the data on the impact of rising mortgage rates on the housing market (e.g. appreciation and sales).

There are 6 times in recent history where mortgage rates moved more than 1%.  The average increase in home loan rates during those 6 periods of time was 1.46% and the average home price increase was 8%. Historically speaking, rising home loan rates has a positive impact on home prices.

Raleigh Mortgage Lender & Certified Mortgage Advisor Kevin Martini

As discussed in episode 138 of the Martini Mortgage Podcast

changes in home values when mortgage rates rise more than 1 martini mortgage group.001

Transcript of episode 138 of the Martini Mortgage Podcast with Kevin Martini

rising mortgage rates impact on housing martini mortgage podcast

There is no question that mortgage rates today are higher than they we last week, last month or even last quarter and even last year or the year before that. In 2022, there has been an acceleration of mortgage rates, when I say acceleration, 2022 started basically right at 3% and today mortgage rates are basically at 5%. The first quarter of 2022 is not the first time that there was a significant increase in mortgage rates. How are these rising mortgage rates going to impact the housing market?

Welcome to episode 138 of the Martini Mortgage Podcast, my name is Kevin Martini, and I am a Certified Mortgage Advisor with the Martini Mortgage Group which is located in Raleigh, North Carolina however I help families in all 100 counties of North Carolina and pretty much in every state in the U.S. too.  I am calling this special episode, rising mortgage rates impact on housing.

Freddie Mac publishes the Primary Mortgage Market Survey every week and they have done this since 1971. At the end of December of 2021, the 30-year fixed mortgage per their lender survey was at 3.11%. On March 31, 2022, their lender survey was at 4.67%. In the first quarter of 2022, the 30-year fixed mortgage rate increased 1.5%. 

Let me get granular what that this means.  The average principal and interest payment on a 30-year fixed mortgage has increased about $100.00 dollars a month per $100,000 borrowed in the first quarter of 2022. WOW, that means a $300,000 mortgage would have had a $300 a month increase in payment in the first quarter. I can understand how one would think that this rise of mortgage rates is going to impact housing negatively but is it?  Will this rise in home loan rates means decline in home values in the future? Will mortgage rates keep rising at this pace? And what does it mean for housing? All great questions.

Let me tackle the future of mortgage rates. It is my opinion and the opinion of many industry experts that home loan rates will move even higher during 2022. I feel the rate of increase, no pun intended, will not be as aggressive as it has been however there are so many external factors influencing the markets that could negate that statement, specifically the Federal Reserve unwinding their balance sheet of 2.7 trillion in mortgage bonds.

You see, mortgage rates live in the Bond market as a Mortgage Backed Security. When Bond prices rise, yield is lowered and when yield is lower than mortgage rates are lower.  Now when Bond prices are lower, yield rises to attract more investors.  When yield rises so does home loan rates in Raleigh, North Carolina and in every state in the U.S.

The Federal Reserve purchase of these 2.9 trillion dollars of mortgage bonds started in March of 2020, and these purchases continued during the evil pandemic and this caused historic mortgage rates.  It is not if the Fed will sell, it is when Fed will sell these Bonds.  When they do, buckle up.  The Federal Reserve decision on short term interest rates really doesn’t impact mortgage rates in the short term but in the long term, their control of short-term rates could temper inflation and when inflation is under control that is good for mortgage rates.  

WOW!  I went on a rant for a moment there, let me get back to the impact on rising rates on home prices.  There are 6 times in recent history where mortgage rates moved more than 1%.  The average increase in home loan rates during those 6 periods of time was 1.46% and the average home price increase was 8%. Historically speaking, rising home loan rates has a positive impact on home prices.

Let me break down the periods of time.  Period number 1 started in October 1993 and ended in December 1994…during those 14-months the mortgage rate increased 2.38% and during that same period home prices went up 3%.

Period number 2 started in January 1996 and ended in September 1996…during those 8 months rates increased 1.2% and home prices went up 2%.

Period number 3 started in October 1998 and went on for 19 months so ending in May 2000.  Home values went up 13%.

Period 4 started In June 2022 and went on for a year. Mortgage rates increased 1.06% and home values went up 13%.

Period 5 started in June of 2005 and ended in July 2006…during those 13-months, home loan rates increased 1.18% and home values went up 7%.

And in the 6th period which started in November 2012 and ended in December 2013 which was 13-months, mortgage rates increased 1.11% and home prices went up 11%.

Let me say it again, recent history has shown an increase in home values when home loan rates have increased more than 1%. I believe this recent move in home loan rates in 2022 will yield an unprecedented historic increase in home prices not just because the increase in mortgage rates but in addition to the fact we have today, low inventory levels of homes for sale. When you see headlines that say home sales are down that is because there are not enough roofs available for sale not because there is not a lot of people that need and want roof. 

Let me share a Kevin Martini audio nugget with you. 2021 will go down as one of the best years in real estate history.  Many people made more money with their home than they did at their job in 2021. Will 2022 be a rinse and repeat of 2021? I think so! 

With that said, I do not think that home sales will be as high as they were in the past and that is not because of the lack of demand, it will be because of the lack of supply. I do believe that home appreciation will continue in 2022 and for many years to come but not at the level they had in 2021. 

Let me say what I said in a different way so there is no misunderstanding.  Home values are forecasted to appreciate this year and beyond for that matter in the 5-year forecast.  In the April 2022 Raleigh Real Estate Report Card, it highlights that the median home price in Raleigh, North Carolina today is $395,673 and in 60-months that median priced home is expected to be over 24% higher which put sits value at $491,343.  So, getting micro with the Raleigh, North Carolina real estate market, homes are expected to appreciate over 9% in 2022. Last year, in North Carolina, homes appreciated north of 21%.  2022 may not be as strong in appreciation as it was in 2021 but it is still going to be strong.

Real estate today represents a rare opportunity, and it is never to soon or too late to explore your options. You have not missed out, but you need to take steps pretty darn soon to take advantage because home values are headed upwards and so are mortgage rates. 

If you have questions about what you have heard in this episode of the Martini Mortgage Podcast, I am here.  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 there and you can also securely apply online or book an appointment with me.  Be sure to check out the April 2022 Raleigh Real Estate Report Card which can be found in the learning center. 

Thank you for tuning in and thank you in advance for sharing this episode with someone you care about that could benefit. My name is Kevin Martini and this was episode 138 which has been called; ‘Rising mortgage rates impact on housing.”

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

Private Mortgage Insurance (a.k.a. PMI)

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Private Mortgage Insurance (a.k.a. PMI) is a good thing!  In special episode 137 of the Martini Mortgage Podcast, Certified Mortgage Advisor Kevin Martini shares 5 Benefits of Private Mortgage Insurance.

There are many myths associate with getting a mortgage.  Some of the myths are relating to credit score need to get a home loan and many myths are associated with the amount of down payment needed to secure a mortgage. One does not need to have perfect credit to buy a home nor do they have to have a 20% down payment to secure a mortgage.

Private mortgage insurance provides a competitive edge to borrowers today because it helps more people afford homeownership.

Raleigh Mortgage Lender & Certified Mortgage Advisor Kevin Martini

5 Benefits of Private Mortgage Insurance

There are more than 5 Benefits of Private Mortgage Insurance however on 5 are shared by Kevin Martini in episode 137 of the Martini Mortgage Podcast are:

Benefit 1 of Private Mortgage Insurance is:

Private mortgage insurance allows one to buy a home sooner and earn more equity with a lower down payment.

Benefit 2 of Private Mortgage Insurance is:

Private mortgage insurance provides expanded cash-flow.

Benefit 3 of Private Mortgage Insurance is:

Private mortgage insurance provides the ability to buy first and then sell.

Benefit 4 of Private Mortgage Insurance is:

Private mortgage insurance helps overcome appraisal issues.

Benefit 5 of Private Mortgage Insurance is:

Private mortgage insurance provides the ability to afford homes in higher price points.

private mortgage insurance martini mortgage podcast

Many people believe the myth that they have to have perfect credit and a 20% down payment to secure a mortgage home loan today.  Perfect credit and 20% down payment is a widely held but false belief.  Another misconception is that private mortgage insurance is a bad thing, this to is a misconception.  Private mortgage insurance is a good thing and access to private mortgage insurance is not reserved for first-time homebuyers only.  It is time to rethink private mortgage insurance because it is a tool to help more people become homeowners.

Welcome to episode 137 of the Martini Mortgage Podcast, my name is Kevin Martini and I  am a Certified Mortgage Advisor with the Martini Mortgage Group which is located in Raleigh, North Carolina however I help families in all 100 counties of North Carolina and pretty much in ever state in the U.S. too.  I am calling this special episode,  5 benefits of private mortgage insurance.   

Before I start to dig into the 5 Benefits of Private Mortgage Insurance, know that private mortgage insurance is also known as PMI, mortgage insurance, MI or private MI. Whatever one calls it is, PMI is a guaranty that reduces the loss to lender in the event a borrower doesn’t repay their mortgage.  Let me share an audio 30,000 feet example for illustration on how PMI works.

Let us assume a borrower is buying a $200,000 home with a fixed rate mortgage and they are putting 10% down, hence a $180,000 mortgage.  With a 90% loan-to-value on a fixed rate mortgage 25% coverage is required for most conventional home loans.  In other words, the mortgage insurer is covering 25% of the loan amount or responsible for paying 25% of the outstanding loan balance in the event of default which leaves the lender risk at 67.5%.  If there was no PMI, the lender would have all the risks. Because of the coverage protection PMI offers lenders, PMI creates an opportunity for borrowers to buy with less than 20% down.  

Now to the 5 Kevin Martini Benefits of Private Mortgage Insurance.  

Number one is, private mortgage insurance allows one to buy a home sooner and earn more equity with a lower down payment.  Let me explain with a story…

Walter is renting in Raleigh and he has a good job with a little money saved up however Walter does not know if you should keep renting or if he should buy a home. Let us assume that Walter has $10,000 saved up however his folks think he should hold off on buying until he can save more money for a 20% down payment.  Should Walter explore his homeownership options now or should he keep renting until he has the 20% saved up?  

Before I move on, as a Certified Mortgage Advisor I provide a human touch to the families I serve, I assess the full financial picture, understand future goals and design a mortgage product that meets needs if homeownership is right strategy.  I share this because homeownership is not right for everyone and that is OK.  If it is right for you and your family, taking action sooner than later is smart.  

Let us assume that I have accessed that homeownership is right for Walter.  Here are some factual nuggets I would share with him.  

I would share that home prices and mortgage rates could rise and this increase would make his eventual purchase more expensive.  

I would share that the rent he pays will not build him any equity and I would highlight rents are rising every year.

I would share that there are home loan products offered by the Martini Mortgage Group that only require 3% down payment.

I would also highlight the cost of waiting…in other words, it would likely take 5 to 7-years for Walter to come up with a 20% down payment based on his current savings.  According to the April 2022 Raleigh Real Estate Report Card, the median home price is $395,763 and the appreciation forecast for the next 12-months is 6.94% and for the next 60-months homes in Raleigh area are expected to have a cumulative appreciate of 24.15%.  This means waiting for 5-years to save for the 20% down payment would cost $95,571.  Oh by the way, who knows where mortgage rates will be in 5-years from now.  We know that today, home loans rates today are not as low as they have been however they are still at historic levels.

Private mortgage insurance would allow Walter to buy a home sooner and earn more equity with his under 20% down payment he has today.  

Number two of five Kevin Martini Benefits of Private Mortgage Insurance is Expanded Cash Flow. 

Remember that PMI is not an exclusive benefit for only first-time home buyers, repeat home buyers have access to private mortgage insurance too! There is nowhere that it says you have to go from small home to medium house before you can afford your dream home.  Putting less down can be more.  

Let me share a real-world family that I helped.  This family has 2 young kids plus one on the way.  They simply outgrew their current house, and they needed a bigger home to accommodate their growning family. They had enough for a 20% down payment but with their day care expenses were getting ready to explode plus having knowledge of their future plans they had which I learned during our mortgage strategy session, I developed a lower down payment financing solution.   family.  The elected to go with a 5% down option and saved 63,750 of cash…yes, their payment went up but it would have taken them 12-years to re-save that 67,750.  Plus since they were already in their home for over 2-years, that 63,750 was tax free and this mortgage strategy expanded their cash-flow. Oh by the way, private mortgage insurance is not required to be on the loan forever.  There is a point that PMI can fall off the loan and that will be an opportunity for a lower payment without refinancing.  

Number three of five Kevin Martini Benefits of Private Mortgage Insurance provides the ability to buying first & then selling. Sometimes one needs to buy first and then sell however…they qualify from a debt-to-income perspective but the do not have a large down payment.  Take a look at the family I just talked about…they both work and they have 2 kids and one on the way, they did  not have time to properly stage their house for sale nor did they have the ability to keep the house model home condition  but they did have some liquid cash plus some monies in their 401K plus they qualified with 2 mortgages.  

Here is what I did, they put 5% down…some came from cash on hand and they took a loan from their 401k.  They purchased the home using PMI and once their home sold, they paid back the 401K loan and had the extra cash they needed too. The other benefit with this strategy is they knew they would never be homeless and they had time to find their dream home because they already had a roof over their head and no pressure to find a home by a specific date. 

Number four of five Kevin Martini Benefits of Private Mortgage Insurance it helps overcome appraisal issues.  

As you know, at the time of this recording we are in a very hot real estate market,.  I had a client that finally had her bid accepted on the perfect place for her to call home.  The listing price was $380,000 but she offered $400,000 to be competitive.  She had a plan put 20% down but sadly there was an appraisal gap.  The home appraised at 380,000.  Now she did not have the ability to put the 20% down and cover the appraisal gap.   I developed a strategy using private mortgage insurance where her payment actually became exactly the same with 15% down as compared to what they originally expected thanks to the help of PMI.  Yes, this was an advanced strategy used as a Certified Mortgage Advisor and she was able to reap the reward of my extensive training and on-going continuing education to provide cutting edge home loan solutions and get her into her dream home.

Finally, Number five of five Kevin Martini Benefits of Private Mortgage Insurance is PMI provides the ability to afford homes in higher price points. Simply put, PMI helps you expand your house hunting options.  .  PMI will help you break into new neighborhoods and new price points.

Let me get real, it takes time and hard work to save money.  Let us assume that you have saved 15,000.  For simple illustration you would have 3 options.

Option number one would be buy a home for $75,000 and put 20% down or explore the other 2 options that include the use of private mortgage insurance to amplify your buying power.  With that said let me share option number 2…you double the purchase price to $150,000 and put 10% down or you 4X your purchase price to $300,000 and put 5% down.

I am not a real estate agent however I know there is a material difference between a $75,000 home to a $150,000 home and there is a quantum leap from a $75,000 home to a $300,000.  Assuming, of course, that they can afford the higher monthly payment that accompanies the larger home price then when using PMI you are offered increased buying power and expand their home search, allowing yourself and your family  to consider a wider range of home prices and available homes for sale.

WOW, that was a lot wasn’t it?  In closing let me share this with you.  Private mortgage insurance is there for you when you want it or need it and it is not there when you don’t need it.  PMI can usually be canceled when the loan either reaches the cancellation point due to amortization of the original loan amount, or the borrowers request cancellation based on an increase in their home value due to appreciation or home improvements. 

If you have questions about private mortgage insurance or about how PMI can help you and your family, I am here.  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 there and you can also securely apply online or book an appointment with me.  Be sure to check out the April 2022 Raleigh Real Estate Report Card which can be found in the learning center.  

Thank you for tuning in and thank you in advance for sharing this episode with someone you care about that could benefit. My name is Kevin Martini and this was episode 137 which has been called; ‘5 benefits of private mortgage insurance 

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

6 Financial Reasons for Homeownership in Raleigh, North Carolina

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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.

Kevin Martini | NMLS 143962 | Certified Mortgage Advisor and Producing Branch Manager | Martini Mortgage Group at PCL Financial Group (powered by Celebrity Home Loans, LLC NMLS 227765) | 507 N Blount St Raleigh, NC 27604 | (919) 238-4934 | www.MartiniMortgageGroup.com |Kevin@MartiniMortgageGroup.com | nmlsconsumeraccess.org |Equal Housing Lender

Logan Martini | NMLS 1591485 | Senior Mortgage Strategist | Martini Mortgage Group at PCL Financial Group (powered by Celebrity Home Loans, LLC NMLS 227765) | 507 N Blount St Raleigh, NC 27604 | (919) 238-4934 | www.MartiniMortgageGroup.com | Logan@MartiniMortgageGroup.com | nmlsconsumeraccess.org |Equal Housing Lender

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.

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 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