For Buyers who may be on the fence as to buying now or waiting until next year, here is a simple calculation that can help make your decision easier. Let's say that your buyers are waiting for the prices of homes to drop another 5%. Over the same time frame interest rates increase by 1%. A simple example of why to buy now is as follows
- Purchase price today 200,000 at 5% interest gives a principal and interest payment of $1073.
- Waiting until the price drops 5% but the interest rate is 6% gives a principal and interest payment of $1139.
$66 per month may not seem like alot but it becomes almost $8000 after 10 years and $8000 is what every first time home buyer is trying to get. It is just a simple math problem.
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