# Procrastination Has a Price

By
Real Estate Sales Representative with Realty Executive Midwest

Procrastination Has a Price

With the real estate market continuing to recover gradually there are still people who are set in waiting until the perfect moment to buy a home. I think the perfect time to buy is now and let me take a moment to show you why I say that.

The average sales price for a home in DuPage County at the end of January 2013 was \$235,151 and one year later the average sales price was \$268,499 a 14.2% increase. Now where these stats should really open a persons eyes is in the monthly payments.

If a person bought a home in DuPage County at the end of January 2013 for \$235,151 and put 10% down, with an interest rate of 3.50%, their payments should have been somewhere in the ballpark of \$1048.32 with \$97.98 of that being mortgage insurance.

Now let's say that same person decided to wait a year to buy that same kind of home at the end of January 2014. The new price would be \$268,499 and our buyer would have had to come up with an additional \$3335 for the 10% down payment. The mortgage insurance would jump up from \$97.98 a month to \$111.87 and the interest rate would have been in the neighborhood of 4.5% leaving the buyer with a mortgage payment of \$1336.28.

The Mortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors are projecting the mortgage rate to be in the vicinity of 5.25% at this time next year. With the home values steadily rising along with the interest rates, waiting can be pretty costly but exactly how costly?

How about \$122,570 extra for that perfect home. In 2012 the total amount of interest to be paid out on our \$235,151 home would have be \$130,486. 49. The amount of total interest paid for the same home in 2013 at the purchase price of \$268,499 would be \$199,135 and at this time next year with a modest 6% increase in value and a projected 5.25% interest rate, our home should cost \$284,608 with the total amount of interest being paid at \$253,056. I don't know about you but I think that could pay for a lot of corned beef and cabbage.

If you have any questions about theses statistics or any other real estate related matters I'm never to busy to answer your questions.

Posted by

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Joe:  There is no doubt about it ... waiting cost you money, as far as home prices, interest rates, and mortgage costs go.  IF you can buy and hope to buy ... a talk with a Lender will provide the info and numbers you need to do your own comparison with your personal financial scenario.  The sooner, the better ...

Gene

Mar 02, 2014 05:48 AM
Joe Kenny
Realty Executive Midwest - Darien, IL

Gene- Thanks, if anybody knows how to help a person come up wit their own conclusion it's you.  It's a good life.

Mar 02, 2014 05:55 AM
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

You can never know the perfect time to buy, but you have provided a great explanation of why now is a good time.

Mar 02, 2014 10:27 AM
Joe Kenny
Realty Executive Midwest - Darien, IL