What If I Wait Until Next Year to Buy a HOME?

First-time home buyers are crowding to the housing market more than any time in the last years. There are many renters who are ready and willing to buy their first home!! They are now realizing they are able to afford to buy and not only that but SAVE each month!!  Many first-time home buyers are Millennials (born between 1981 – 1997). You are probably wondering if now is the time for you to buy a home as you see many friends and family getting into the real estate market by buying. Well it is! The Cost of Waiting to buy is actually defined as the additional funds it would take to buy a home if prices and interest rates were to increase over a period of time. Not sure what that means? Well lets make some predictions on how much it cost today to buy a home. Right now mortgage interest is currently at about 4% which is expected to rise throughout the year.  If you’ve been looking at homes on the market now and you saw your ideal home cost around $250,000. With an ideal down payment of about more than 20% your monthly payment would range around $1,190.00

Your monthly mortgage payment (principal & interest only) would be $1,190.00

If you are not ready and willing to wait rather than  to move out of your apartment or rental home, it will not be beneficial in the long-term. If you decide to wait until perhaps next year, CoreLogic predicts that home prices will only increase by approximately more than 5%. This means that the home you searched in the current market right now will rise in price around $13,000 (Future Home Value: $262,750). Over this time period interest rates will rise high at around 5%, increasing your new monthly payment to about $1,410.50. That’s a $220 increase per month!

You would have saved $220+ each MONTH!!!

 

Imagine what you can do with $220 a month??!!!

• That can be your car insurance payment
• Need a new car? That could be your monthly payment each month
• Savings for any emergencies that may come up in the near future
• Pay for some of your monthly expenses (utilities, food, debt)
• Or help pay off your student loan

Let’s add it up for the year now. Over the course of your new mortgage at 5.0% with each monthly payment of $220 your annual additional cost would be $2,640 for the year! We could come up with 100’s of ways to spend $2,640!

That $2,640 could be a week trip to another country or paradise! Maybe you want to remodel your new house with that money?! Or buy a new Flat Screen TV for your new living room? Perhaps you may just save it!

Eventually once you add up your additional cost of $2,640 for the year over the next 30 years you would have thrown away $79,200!!! Ouch this will hurt your pocket! Now THINK what you could have done with $79,200? All because you waited an additional year to buy a home. Don’t think moving in 2015 is such a hassle or you don’t have the right resources. If you are unsure just ask an agent or do the research and math to see how this can effect you in the long run! Lets just say you made the choice to wait till next year knowing what you know now, would you do things differently and make the right decision NOW? We hope so!

Try doing the math with Zillow Mortgage Calculator ! Any questions feel free to contact your local real estate team ! Most importantly we hope you reach out to us to guide and educate you on what we think all First Time Buyers should know!