Still Waiting For The Right Time To Buy? You May Be Missing Your Window

Don't look back in a year from now and wish you would have done something. Yes, prices on homes have been rising and the market has been competitive. And yes, now we are seeing rates on loans go up as well. But are you sitting back watching all this, and waiting for the right time to buy? Are you waiting for that "bubble" to burst and the rates to go back down so that you can get that good deal on a house. I wouldn't hold your breathe if I were you. We've already watched the market take off so fast it could have given us a whip lash. And we have sat back and watched all these people buy homes in multiple offers and bid over asking for these homes. And it seems that you may think those people bought at the wrong time?  Well...I believe the people who have purchased homes so far this year were right on the money. While they may have had to jump through some hoops to get that house and they may have had to bid over asking, they were able to lock in these unbelievable rates on loans...and that is where the real money is saved. Because, here is the math...if you paid $30k more for a $500k home (with 20% down) than it was worth 6 months ago...well, that is $30k, and nothing more. But if your interest rate, when you bought this house at $530k, was 3.6% then you really got a great deal.  If you buy a house for $530k today (same 20% down) and you lock in a rate of 4.6% then you will be paying over $88k more for that home...and the rates will eventually only be going up. (See the math below) The real savings and deals on homes are found in the interest rates we have today. So don't look back in a year from now and wish you could have made a move...go ahead and do it today.

$530,000 price
$106,000 is 20% down payment
$424,000 total amount borrowed

3.6% loan for $424,000 = $1,927/ month
$1,927/mo x 360 months = $693,720
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$530,000 price
$106,000 is 20% down payment
$424,000 total amount borrowed

4.6% loan for $424,000 = $2,173/ month
$2,173/mo x 360 months = $782,280
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(total you pay with 4.6%) - (total you pay with 3.6%)

$782,280 - $693,720 = $88,560