GET OFF THE FENCE ALREADY!!!
Agents want to shout this from the top of their lungs. But you won't know it is too late to buy until we are past the bottom of the market. The question is...are we on the last downward slide before we head up or are we heading up? The answer is - it really doesn't matter. If you can buy at the bottom of a bell curve...it doesn't matter where you are --- buy! It is always the best time to buy when you are at, approaching, or leaving the bottom and you don't know you are until you have left the bottom and it is already gone.
So....here are the top 7 reasons why you should get off the fence and buy now:
- Owning a home (for a long period of time) builds equity and stability
- You can negotiate the BEST prices and TERMS when the market is slow
- You need to live somewhere - stop throwing money away on rent
- Even if prices go down you've started paying off that mortgage - (29 years to go!)
- Just a 2% rise in interest rates can dramatically impact your affordability
- When inflation kicks in (and it will sooner or later) home prices rise and rents rise more
- Everyone knows it is sound investment advice to --- Buy when everyone is desperate to sell and sell when everyone is desperate to buy --- but we let our fears stop us from making good sound decisions.
I didn't even mention (okay here I mention it) - the mortgage interest deduction!!!
Not convinced? Here look at what the difference in rates and pricing do to your over all costs and payments:
- At a rate of 4.25% with 20% down on a $500K home your mortgage payment (without PITI) is about $1968 - (the total cost over the life of the loan would be about $708,305)
- At a rate of 6.25% with 20% down on a $500K home your mortgage payment (without PITI) is about $2463 - (the total cost over the life of the loan would be $886,542)
- So, for a similar payment - prices would have to fall about 20% in order for you to have the same mortgage payment at 6.25% - so now you can afford a $400K home with 20% down (without PITI) your mortgage payment is about $1970 - (the total cost over the life of the loan would be $789,512)
This shows you that INTEREST RATES can matter even more than prices over the long run - prices can fall as much as 20%, but if interest rates increase just 2% in this example you will pay $80,000 more for the home. Interest rates were as high as 18% on homes - so don't think it won't happen again.
If you would like more information about your situation or to speak to us about purchasing or selling your home or trading up or down - we would be delighted to talk with you and provide you with good information.
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