Many of the potential buyers I've been talking to for the past few months say to me "I'm going to wait! I know prices will continue to come down!" So I did a little research using my calculator.
Let's say that today you could buy a home and use a fixed-rate mortgage loan for $500,000 at 5.5%. At the end of 5 years, you would have paid approximately $132,640 in total interest.
Let's then imagine that you WAIT! and get that same home for $30,000 less than today---but at that point interest rates have gone up to 7.25%. So let's see--now you have a loan for $470,000 at 7.25%. At the end of 5 years, you would have paid approximately $165,954 in total interest.
So 5 years from now, you have paid $33,314 MORE in interest just to save $30,000 on the purchase price.
Somebody check my math okay? But I've run the numbers a couple of times just to see what happens. "Waiting" looks like it might actually be costing you more than jumping in right now!
Home buyers are in the eye of the perfect storm---the lowest home prices in years combined with the lowest interest rates in years. This kind of real estate junction is rare indeed and we should ALL be taking advantage of it.
If you've been "waiting" to buy, please give me a call and let's look at the numbers together and talk about your options. Don't miss out on the incredible opportunities available in TODAY's real estate market.
Happy Homes!
-Marci Orler, the First-Time Homebuyer Specialist
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Great job Marci! I am glad you are doing the math - because its not my strong suit.
ReplyDeleteI have to admit that I "cheat" as a Realtor and use tools available to me such as www.bankrate.com and a mortgage amortization schedule in Calyx Point software. ;-)
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