Buying a home is for most the biggest purchase they will ever make. With that being said, a lot of consumers really think long and hard before signing on the dotted line and becoming homeowners. While I always suggest that you should think and weigh your pros and cons, waiting currently can ultimately cost you more money and get less house.
Your monthly mortgage is effected by your interest rate which is the price the bank charges you for borrowing the money to buy. Currently the national average is roughly 5% (credit, loan type, and other factors will determine where each buyer ultimately lands). National finance forecasters are expecting the rates to continue to rise, which makes buying a home a little more costly. What that means for you is that the same house, at the same purchase price can result in a higher monthly payment should interest rates rise in the future.
Its no guarantee that rates will rise but it also isn’t a guarantee that they wont. Just to give you a quick example of what this would mean for you. (Again, these are just estimates that I’ve seen with clients I work with. I used a home with taxes of $5000 for the year and insurance of $1200 for the year, going with a FHA loan with 3.5% down)
Purchase Price Interest Rate Monthly Payment
$200,000 4.25% $1,621
$200,000 4.50% $1,650
$200,000 4.75% $1,679
$200,000 5% $1,709
$200,000 5.25% $1,739
$200,000 5.5% $1,770
I Hope this helps you understand the urgency of buying as opposed to waiting. Its costing money to wait and ultimately for the budget strict buyer results in less house. Contact us today if you’d like to connect with one of our go to mortgage professionals.