Posted by Stateline Funding Corp.
Waiting to buy a home, when interest rates are extremely low will actual cost you more money in the end. Let me explain why.
Cost of Waiting Scenario 1
It makes sense to want to wait for house prices to drop before purchasing a home. However, while waiting, you aren’t considering the fact that interest rates may increase during that time. How do increased interest rates affect your home purchase? Take a look at the chart below.
As you can see the house price did decrease, but so did your buying power. If you would have purchased your home when the interest rate was at its lowest, you would have been able to buy more for your money. Instead, this scenario results in $37,000 less in buying power for the same mortgage payment.
Cost of Waiting Scenario 2
This second scenario shows the cost of waiting while risking an increase in interest rates. As you can see, a 2 point increase in interest rates increases the monthly payment for the same priced home by $311.
The overall TRUTH in the cost of waiting to buy a home, is the best time to buy is now! The market is in the best position for homebuyers with the lowest interest rates we’ve seen in over 50 years!