What is the Potential Cost of Waiting?
For many years we did not have to worry to much about the cost of waiting because housing prices were flat and interest rates were historically low.
However, home prices are increasing and interest rates are rising. More than ever you now need to think about how waiting to buy a home can potentially cost you thousands more.
Take a look at the difference in the average price and interest rate from Dec 2012 to Dec 2013. The average price increased by $16,800 and the average rate increased by 1.11% with an increased payment of $228.35 per month.
The person who decided to wait and purchase late 2013 paid an average of $2,740.20 more than they would have if they would of pulled the trigger a year earlier.
Not saying they got a bad deal, prices are still great and rates in the 4% range are still pretty damn amazing. The point is, if they made the jump earlier they would have benefited and saved thousands.
What will the estimated cost of waiting be from Jan 2014 to Jan 2015?
Most analysts believe that by this time next year interest rates will be over five percent. For someone who has been in the industry for 18 years I still think that’s not a bad interest rate.
However if you had the chance to borrow money at the current average of 4.31% instead of the projected rate of 5.30% that Freddie Mac estimates for the 1st quarter of 2015 wouldn’t you?
The monthly estimated savings of $202.52 or $2,430.24 annually can make a huge difference. That difference could buy you more house, could be invested in the stock market, can be used to help pay down other debts, can be used to save towards a vacation or towards your kids college fund.
Obviously no one has a crystal ball to determine what exactly interest rates will be or when they will go up. But looking back at the past year and reading the studies from the top analyst that rates will go up, is it worth the gamble to wait?
Take the first step and contact your local Real Estate professional today. Don’t put this off and miss an opportunity to save thousands. Even if you don’t think you will qualify today, an experienced loan officer will review your situation and put you on a plan of action so you can take advantage of homeownership in the near future. Time to take the first step!
Sean Young Senior Mortgage Advisor FirstCal Colorado NMLS: 191647 loanofficerseanyoung@gmail.com www.mylendersean.com Office: (720) 457-5531
*None of the payments listed are actual quotes or offers being made, they are based on average rates and average home prices from the sources below. All payment examples are based on principal and interest with fixed interest rates for 30 years with no taxes or insurance included and actual payments can be higher. As stated above there is no way of knowing what interest rates will do in the future and the above is only an example from what analyst predict and can be sourced by the links below.
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Sean Young
Sean has been a Mortgage Loan Officer in the great State of Colorado for the last 26 years, a nationally recognized real estate blogger who loves teaching Social Media, Real Estate Technology, and Continuing Education classes. Sean provides weekly Real Estate Agent Tuesday Webinars that give the latest marketing strategies and tips on how to grow, build, and increase your visibility, credibility, and brand as a Real Estate Agent. Looking for a Home Loan? Sean and his team can provide you with the expertise, professionalism, and customer service that will ensure that your transaction goes smoothly.
