Real NEastate: Morrell Park or bust

Q: I want to buy a three-bedroom house in Morrell Park to be close to my parents. The problem, is I am only approved for $120,000 and most of the homes I like cost more. Should I wait and see if the market gets better, or should I just look elsewhere?

A: The average price in Morrell Park today is $186,000. It will be extremely difficult to find a home in Morrell Park for $120,000, especially since the lowest price for a home right now is just under $150,000. Just so you know, only four homes have sold in the past year for less than $150,000.

Waiting? I don’t think it’s prudent. I honestly can’t say there will be a better time than now to buy. Prices have come down in the past four years, and I don’t know where they’ll go yet, but it is mostly a great time to buy now, because of the low interest rates.

You can afford more now at a lower interest rate than when interest rates go up. Buying a home for $120,000 with an FHA loan at a 5 percent interest rate translates into about $900 per month in Northeast Philadelphia, if you are not putting much down. If the interest rate goes up just one percent, your monthly payment jumps to about $980, which may take you from being qualified for $120,000 down to $108,000.

If you want to stay close to your parents, you can definitely find a three-bedroom in Holmesburg or Mayfair in your price range. There are 54 in your price range in the 19136, but none in the 19114 zip code.

Good Luck!

Stacey McCarthy is a real estate agent with the McCarthy Group of Keller Williams. Her Real NEastate column appears every Wednesday on NEastPhilly.com. See others here. Read other NEast Philly columns here.