Tuesday, August 11, 2020

So you keep hearing “Now is the time to buy...interest rates are at an all-time low...buying power is greater!”

What does that mean to you in dollars and cents?

During the COVID period, where we have all endured lockdowns, restrictions and social distancing guidelines, we try to focus on the positives that have also occurred along the way with the harrowing, unprecedented experience we all have to put up with. I have previously mentioned the accolades of recognizing the positives of children bike riding as a healthy source of outdoor exercise, learning how to cut one’s own hair and nails, catching up on the novels to read and videos to watch that have so far been unattainable due to time constraints, and finally, honing one’s skill on “zooming” in on everything that life has to offer. Well, you have been given the precious gift of extra time that you never thought you had. And now, with purchasing a home, you have been given the precious gift of low mortgage rates, allowing for a stretch of your purchasing affordability.

Let’s Break It Down


Comparing the typical 30 year mortgage terms, at 3%, based on a standard 30 year term, the amortization chart indicates a rate of $4.216 per $1,000 borrowed on a monthly payment. Triple the rate at 9% with the same 30 year mortgage would require a rate of $8.046 per $1,000 borrowed on a monthly payment. Differentials in cost would dictate taking advantage of the current low rate to purchase a home. For the same mortgage with a higher rate in this example, a consumer would be paying that much more. For example, a mortgage of $300,000 per month would be $1,149 higher monthly on a steeper rate for the same mortgage, and $13,788 yearly more, close to $14,000 extra for the same value. Based on logic and financial sense, now is the time to buy!

Be aware that homes in the past year have risen in value in the area, and Teaneck values, for example, have gone up 2.7% to a median home value of $426,216. Other contiguous areas also report a rise in value, including an increase of 3.1% of median home values in Bergenfield to $404,625 and a rise of 1.1% in Englewood over the past year to $408,339. Although the unemployment rate is high, and the economic outlook is grim, the new pool of buyers running from the city to the suburbs to enjoy a lifestyle which combines the space and privacy needed in these pandemic times, has allowed for saturation of a hot market whereby multi-competitive offers are elicited for homes that are priced fairly. I have experienced offers in which the asking price keeps escalating due to the nature of competition for the same property, driving the market value higher. The offset is both good and bad for purchasers and sellers.

When purchasing a home, my buyers are always concerned about sustainability of value. Real estate will always be a good investment, as a “piece of the rock” will be coveted on many levels of both personal and financial needs, even during cyclical financial climates. So, if the time is right for you, get ready for your next sale or purchase—you’ll be glad you did!

Ruby Kaplan is a realtor licensed in both New Jersey and New York. Visit www.rubybobbyhomes.com  for more information. The Ruby and Bobby Kaplan team/United RE/ will promote your home with the best of social media and create alerts for your criteria of housing needs. Your Housing Needs Are Our Priority! Ruby can be reached at 201-314-4152 or on her cell at 917-576-4177 or at [email protected]