Are you hoping prices will come down so you can buy a house? Consider this…
If you buy a $250k house with 3.5% interest, and pay the loan off according to schedule, you will spend ~$155k in interest for a total of $405k.
If the price drops to $225k but interest rate rise to 3.75%, you will pay ~$133k in interest for a total of $358k.
If the price drops to $200k but rates rise to 4.00%, you will pay ~$143k in interest for a total of $343k.
Sounds good, right? A price drop of $50k results in a total savings of about $60k even if rates rise.
Here’s the problem. Rates can rise quickly. Trying to time any financial market ‘just right’ is almost impossible.
Keep in mind rates are still near historical lows.
If buying a house is what you want, do it now! Prices may fall but run-away interest rates will steal your opportunity and cost you more in the long run.
Oh, and just to be clear, I DO NOT recommend paying all that interest. Once you have the house. there are options available to significantly reduce the overall amount of interest you pay on your mortgage.
If you need help with the process of buying a house or reducing the total amount you pay, let’s talk.
