What is more important to the buyer price or cost?
In most cases when you are buying a home, price is the biggest concern. What you are really looking for as a buyer though is cost. Here’s why that’s important.
Most people think of the mortgage rate as a fixed cost, but in truth mortgage rates are constantly in flux. Although I can’t predict mortgage rates, it’s important to realize how a rate increase can effect the cost of a home. Here’s a recent post on mortgage interest rates.
As you can see on the chart below, you will save at least a full mortgage (principal and Interest) payment over the course of a year if you buy now instead of waiting. That is using todays interest rate of 3.5%, and the projected interest rate of 4.4% by the end of this year according to a recent poll by the Mortgage Bankers Association.
Currently most statistics indicate that both housing prices and mortgage rates will both be increasing. With these projections, now may be the most opportune time to purchase a new home.
Mortgage Payments based on Interest Rates
Price or Cost?
As you look at the chart, it is easy to see that at a lower interest rate, you can obviously buy a larger home. So while most buyers know what home price they are looking for right now, that may move lower in the coming months.
For those buyers in the market for a new home or even sellers hoping to move up to a new home, this might be the information you need to make the move now!