Would you spend $1 to save $.025?
Would you pay $1 to save $0.25? Of course not. But if you're waiting on housing prices to go down before you buy here in Corsicana, that's exactly what you're doing. Here's an example:
Let's say you have your eye on a home here in Corsicana that's currently listed at $300k. And you can lock in an interest rate of 4.50%. Your mortgage payment would be around $1750/mo if you put 10% down.
Now, imagine that you wait 8-12 months and prices DO actually start to come down. And for this example, we'll say that house is still on the market but it's now listed at just $285k -- that's $15k in "savings" right? You happily buy this home at an interest rate of 6%. I mean, 6% is still a relatively normal rate.
But here's the catch. Your mortgage payment is now going to be about $1906mo. Even though you "saved" $15k on the list price, you're still paying a higher mortgage payment in the end. And $155/mo ads up. In fact, that $15k of "savings" is really going to cost you nearly $56k through the life of a typical 30 year mortgage.
A lot of people think that the housing prices can't keep going much higher and eventually they'll go back down. Now, that's probably true in the long run. And if interest rates stayed the same, you'd be right to wait.
But most people are surprised when they find out that the interest rate has a more significant effect on their monthly mortgage payment than the price of the home! Interest rates matter.
So if you're thinking about buying a home but hesitant to buy at a high price, I'd encourage you to call a lender first. See for yourself if it's "worth" the wait or not.
If you don't have a lender to help or you have any other questions about homes for sale here in Corsicana, give me a call. My personal cell is (903) 875-5504
- Leslie Melton