Enter, MasonMac’s Lock & Shop loan program.  With our Lock & Shop product, home buyers can lock in their interest rate for an extended period of time prior to identifying a property.  This is a great benefit to buyers because they can take the time to find the right home without the pressure of a rising rate environment weighing on the decision making process.

So buyers are protected from volatile rate increased while shopping for a home, but what if rates improve while they look for a home?  Wouldn’t the locked rate then be a bad thing?  MasonMac has you covered!  Our Lock & Shop product features a 1 time float down option, so if the market improves, our customers are able to take advantage by choosing to exercise the float down option within 30 days of their settlement to take advantage of the improved market.

With the float down function, MasonMac customers get the benefit of both protection from rising rates and the ability to take advantage of an improving market, offering some peace of mind to what can be an otherwise stressful home buying process.

When considering buying a home, we think you’ll love the options we present – with long term locks, this Lock & Shop program, and our Buyer’s Advantage process, we put our customers in the best place for a stress-free house hunting and home buying process.  Add to that our highly experienced team of loan officers ready to assist with in depth product knowledge and armed with the technology to streamline the loan process, and home buyers are in the best of hands when working with the team at MasonMac!  

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In today’s world of competitive markets, short inventory, and rising purchase prices, things are tough for home buyers (and sellers, too!).  With sharp appreciation and bidding wars becoming more common, it seems the market is unaffordable, but when diving into the data, it appears that throughout the US, most markets are still very affordable based on wage growth and overall economic factors.

This is, of course, based on a certain definition of housing affordability.  Homes have appreciated in many markets in the 10-12% range recently, and this is the reason many people find things “unaffordable”.  What cannot be discounted though, is wage growth, which is averaging 7% year over year at the moment.

Homes appreciation 10-12%?  Wages increasing 7%?  Sounds unsustainable, right?  Wrong!  Taking a quick glimpse, it appears that things can’t continue this way, but wage growth was near stagnant for a decade, and recent increases leave a lot more room for home prices to continue to climb – great news for home buyers, better news for home owners, and bad news for those “waiting for the dip”.

Let’s take a look at a scenario for a $500,000 mortgage, for a customer making $6500/month income.  We’ll assume, just for math’s sake, the mortgage is at a rate of 3.5%, and the buyer is using a 10% down payment.  Since our loan is $500,000, this makes the home price $555,000. The mortgage payment in this scenario (principal + interest) would be $2245/month.

Home prices at $555,000 and 10% appreciation would make the price after 1 year $610,500.  Someone buying that home with 10% down would have a mortgage of $549,450, and at the same interest rate, the monthly payment is $2,467, or $222/month MORE than the same home the year before (again, assuming a 10% appreciation rate).

Let’s also take a look at the very important income figures – that $222/month increase in mortgage payment is actually only 3% of the $6500/month earnings of our example borrower.  With wages increasing an average of 7%, the average earnings of a $6500/month employee would be expected to be $6955/month with wage growth of 7%, or $455/month more year over year.  And that $455/month more than covers the $222/month increase in mortgage money in this scenario.

Even with home prices going up, in today’s market of increasing wage growth, homes are still affordable.  In fact, today’s market represents the 7^th most affordable market in history, statistically speaking.

Even though housing affordability is still statistically reasonable, it does take some work to get an offer accepted, and there’s certainly a line where the price of a home is “too much”.  We offer our customers a glimpse at the local market using state of the art data tools that are specific to your local market, so if you have questions on how much you can qualify for, how much payments would be, or what the overall health of your local real estate market is, we can help!

Reach out today and we can help you determine your best path to home ownership!

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