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Buying your home? What's more important - Home Cost or Home Price?

By J. Michael Manley

Real Estate Agent with J Michael Manley Team SC#39529

March 31, 2012 11:16 AM

Buying your Greenville Home? See which matters most, the cost or the price?

You may be holding off buying your home right now because you feel you should wait for the home prices to hit bottom but have you considered what the total cost of your home would be if you keep waiting?

Take a look at this graph.

As you can see from this graph, the cost of owning your home may increase if interest rates rise by one percent or two. A $360,000 mortgage would have an interest payment of $1,617 at 3.5%, it will be $1,933 at 5%. It increased by several hundred dollars.

Can you afford to wait longer when we have the best interest rate today? We cannot guarantee that interest rates will remain this low tomorrow. We’ve been hearing that interest rates could begin to rise. Lawrence Yun, Chief Economist for our National Association of REALTORS recently said: “Mortgage rates will be starting to rise. From the 3.9 to 4.0 percent average rate in the past five months on a 30-year
fixed mortgage, the new rates will soon be in the range of 4.3 to 4.6 percent”

Interest rates have an impact on the total cost of your home, if they begin to rise, you will end up paying more. Needless to say, you should look at the cost of purchasing a house more than the price of the home.

Are you a first time buyer? Looking to downsize or relocate in Greenville? We advise you talk to realtor before you start looking at homes. Please do not hesitate to contact us – no obligation! We can do an online consultation if you can’t make it in person. We’re happy to serve you!