There is never really an optimal time for any of life’s big moments. I used to think, I will know when… when it came to such things as getting married, having children or yes, buying a house. There never really is a perfect time for any of these things. Sometimes necessity dictates that we make these decisions now. Other times, when issues aren’t pressing, we are able to take the time to educate ourselves on the pros and cons about the decisions that we need to make. The best thing to formulate an opinion, to make up our minds to move in one direction or another, is to get our questions answered about them, in this case – the cost of waiting one year to purchase a home.
So, you are considering buying a home. You have a bit of savings, your credit is ok, you want to take advantage of the down payment assistance/grant money that is our there for home buyers, but you aren’t sure if you want to wait or move forward with this decision. Today, a $200,000 home at 4.25% interest with 5% down payment (no escrow of taxes/insurance) would give you a monthly mortgage payment of about $1060.00. You are busy, moving is a hassle, you aren’t sure if you want to own a home yet… you decide to wait to reassess this decision, and end up putting it off for a year. Now as an example, that same house costs a little bit more at $214,000 and interest has gone up to 5.0%, which would give you a monthly payment of $1225.00.
The difference in payment is $165.00 per month! That is like ripping up a $5 bill EVERY DAY! Over the course of your 30 year loan, you would have spent an additional $59,400 all because the decision to move was not made in 2014! How many times have you said to yourself… “I should have…”? I’d like to think that 30 years from now, you’ll remember this article and how it educated you about waiting – that when looking back, you would say thank you Linda for showing me that it is definitely better to buy now.
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