Hello Friends,
I've heard from many of my buyers that they are going to wait for prices to hit rock bottom. They think they don't need to hurry and buy now because we have not reached the lowest prices of the year. Well, my friends, the time is now!
From my experience and my relationship with our in-house lender I am aware of the upward trend in interest rates. Although they may be lower on Monday, higher Wednesday then back down on Thursday, the overall trend is UPWARD. I have clients who locked in their rates a few months ago at 5.62%. Those rates have expired and are now over 6%.
Let's see what happens if you are looking at a house where your payments will be approximately $4000 per month. Let's say that you can get a 6.15% interest rate today. But you decide to wait because you think this house will come down in price. Sure enough, the price of the house drops $20,000 next month, but your interest rate has increased a half percent. How does this affect your overall monthly payment?
Unless you are paying all cash for your home, you are really purchasing a mortgage which means, you are purchasing a monthly payment. If your interest rate increases 1% you will be paying a monthly payment of about 15-20% higher. A half a percent will be around 8-10% higher. In the long run you will end up paying more for your house if you wait for prices to fall as interest rates continually rise.
This is something to think about if you are ready to buy. Don't wait. This is the year to buy and if you wait too long you may just be missing the boat which I think is leaving the harbor now. Get in now and be happy that you did!
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