How Rising Home Prices Impact Your Buying Power

Home prices in Raleigh, North Carolina have been on the rise, and this trend can significantly impact your ability to buy a home. Buyers often feel priced out of their desired neighborhoods or are concerned about stretching their budget. It’s essential to understand how rising prices affect not just what you pay upfront, but also your monthly payments and long-term financial stability.

One way to manage this is by exploring different financing options. Adjustable-rate mortgages (ARMs) might offer lower initial rates, which can be helpful if you plan to move or refinance within a few years. A Seller-Paid 2-1 or 1-0 Buy-Down Program may be another option, as this allows the homebuyer to reduce their mortgage interest rate temporarily, lowering their monthly payments during the first year(s) of the loan. In a 2-1 buy-down, for example, the interest rate is reduced by 2% in the first year and 1% in the second, returning to the full rate in year three. The seller covers the cost of this buy-down, making homeownership more affordable initially and giving buyers time to adjust to higher payments later.

There are also down payment assistance programs that can help reduce the upfront costs. The more you can put down upfront, the better your loan terms can be, including lower interest rates and monthly payments. So, how can you maximize your home-buying power by boosting your down payment? Here are some strategies that can help.

It’s important to look at all aspects of affordability, including property taxes, insurance, and maintenance costs, rather than just the purchase price. Our goal is to help clients find the best path forward, balancing current market conditions with their personal financial goals.

Certified Home Loans is here to help.  Let’s connect today: 919-510-1108