Delay Will Usually Cost More

Dated: May 20 2020

Views: 8

Two things can happen when the mortgage rates go up before you've found a home or locked-in your mortgage. You'll either pay the current mortgage rate which means a higher payment, or you'll have to increase your down payment to keep the monthly payment at the same level.
If the rate were to go up by ½%, the payment on a $275,000 mortgage would increase by $82.87 per month for the entire 30-year term. That would increase the cost of the home by $29,835.
Some people are purchasing the maximum home that they can qualify for. In that case, they cannot qualify for a higher payment and the only way to buy the same price home is to put more money down which may not be a possibility. The other alternative is to buy a lower price home which may not be in the same area or size which will involve some compromises.
The rate is not the only dynamic that affects buyers waiting to purchase. The home they want could sell to someone else. Prices could increase as new homes come on the market. The question that many buyers ask themselves when they become a victim of the consequences of delay is "What could we have spent the money on if we didn't have to make a higher payment?"
Mortgage rates are very attractive currently and within ½% of the all time low of 3.35% in December 2012. The highest rate was 18.45% in October 1981. Whether you're purchasing or refinancing, it may not be this low again.
To see how it will affect the payment, plug your numbers into this Cost of Waiting to Buy calculator or call me at (347) 788-9294 and I'll help you with it.
Blog author image

Dyanna Moon

I have been in love with real estate since I can remember. I love to spend my days working with amazing clients, marketing homes for sale, negotiating contracts and handing keys over to happy new hom....

Latest Blog Posts

Home Sales About To Surge? We May See a Winter Like Never Before.

Like most industries, residential real estate has a seasonality to it. For example, toy stores sell more toys in October, November, and December than they do in any other three-month span throughout

Read More

Experts Project Mortgage Rates Will Continue To Rise in 2022

Mortgage rates are one of several factors that impact how much you can afford if you’re buying a home. When rates are low, they help you get more house for your money. Within the last year,

Read More

What Does it Mean for a Property ‘Not to Appraise’?

A home’s true market value relies on the appraiser’s evaluation of the subject home and any comparable sales in the area. An appraiser’s fair market value is an independent

Read More

Don’t Wait for a Lower Mortgage Rate – It Could Cost You

Today’s housing market is truly one for the record books. Over the past year, we’ve seen the lowest mortgage rates in history. And while those rates seemed to bottom out in

Read More