First-time homebuyers are flocking tothehousing market in greater numbers than any time inthelast few years. Renters who are ready and willing to buy are now realizing that they are also able to as well. Many first-time buyers are Millennials (born between 1981 – 1997). If you are one ofthemany in this generation who sees your friends and family diving head first intothereal estate market, and wonder if now isthetime for you to dothesame, keep reading!TheCost of Waiting to Buyis defined astheadditional funds it would take to buy a home if prices and interest rates were to increase over a period of time. Let’s look at an example of whattheexperts are predicting fortheupcoming year, and what that really would mean for you. Let’s say you’re 30 and your dream house costs $250,000 today. Right now mortgage interest rates are at or about 4%.
Your monthly mortgage payment (principal & interest only) would be $1,193.54.
But you’re busy, you like your apartment, and moving is such a hassle. You decide to wait until next year to buy. CoreLogicpredictsthat home prices will appreciate by 5.1% inthenext 12 months; this means that same house you loved now costs, $262,750. Freddie Macpredictsthat over this same period of time, interest rates will be a full point higher at 5.0%. Your new payment per month is now$1,410.50.
Thedifference in payment is $216.96 PER MONTH!
That’s basically like taking $8 and tossing it outthewindow EVERY DAY! Or you could look at it this way:
That’s your morning coffee everyday ontheway to work (average $2) with $10 left for lunch!
There goesFridaySushi Night! ($50 x 4)
Stressed Out? How about a few deep tissue massages with tip!
Need a new car? You could get a brand new car for $217 a month.
Let’s look at that number annually! Overthecourse of your new mortgage at 5.0%, your annual additional cost would be $2,603.52! Had your eye on a vacation intheCaribbean? How about a 2-week trip through Europe? Or maybe your new house could really use a deck for entertaining. We could come up with 100’s of ways to spend $2,603, and we’re sure you could too! Overthecourse of your 30 year loan, now at age 61, hopefully you are ready to retire soon, you would have spentan additional $78,105.60, all because when you were 30 you thought moving in 2015 was such a hassle or loved your apartment too much to leave yet. Or maybe there wasn’t an agent out there who educated you onthetrue cost of waiting a year. Maybe they thought you wouldn’t be ready. But if they showed you that you could save $78,000 you’d at least listen to what they had to say. They say hindsight is 20/20, we’d like to think that 30 years from now when you are 60, looking back, you would say to buy now…
Report by Ricky KhamisRealtor Report2016 Best Year for Housing in a De
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