Why Wait to Buy?

Are you on the fence about whether or not to wait for prices to come down to purchase a home today?

Even if prices fall 5%, waiting to buy may result in higher monthly payments due to the likelihood of rising interest rates as illustrated in the examples below.

Comparison
  NOW! WAIT?
Purchase Price $450,000 $427,500
Loan $360,000 $342,000
30-Yr. Fixed 6.375% 7.375%
Payment $2,246/mo. $2,363/mo.

Example #1

Comparison
  NOW! WAIT?
Purchase Price $750,000 $712,500
Loan $600,000 $570,000
30-Yr. Fixed 6.50% 7.5%
Payment $3,792/mo. $3,984/mo.

Example #2

In the first example, you saved $23,000 up front by waiting it out. However, you will end up paying $117 more per month. If you do the math, $117 over the course of 30 years (360 payments), equals $42,120. So if you “WAIT?” for the purchase price of $427,500 and you add on the extra payments of $42,120, this equals $469,620. That is more than what the house is worth “NOW!”

The same can be said in example two. You save $37,500 up front. But that is a $192 difference in monthly payments. Which equals $69,120 more over the course of 30 Years. Again, the total is more than what the house is worth “NOW!”

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply