Thanks Mel Peterson for inspiring this post.
Are prices still declining in my market? Yes. If you wait another 6 months to purchase will you still save money? perhaps not. Wait, what, how can that be.
Well if the house you want to purchase today is listed for $100,000. And you could finance that house for 5% interest for thirty years your principle and interest payment would be $536.82 If you add in that you must also now pay for property taxes and insurance which will add approximately $200.00 monthly we are up to $736,82. And just suppose one major appliance, say the furnace breaks and you have to replace that at a cost of $1500. Total annual housing spending would be $10,341.84 (give or take)
If you are paying $1200./mo in rent for someone else's property mortgage payment, taxes and insurance your landlord replaced a furnace in that same year... he still made $4,058.16 of your money that you could have saved.
Not to mention that if you qualify to itemize on your taxes you will save even more. So continuing to pay rent to a landlord waiting to find the bottom of the market in 6 months, 12 months, two years, hoping that the market will go lower and that maybe interest rates will improve more may cost you money instead. Be wise and do the math and see if making a purchase would save you money now.
The bottom of the market may not be for another year or two, but who knows it could also be today. The problem with "waiting for the bottom" is that you won't know it was the bottom until after things are improving and you can look back and see that it was actually the lowest prices and the lowest interest rates. Then it will be too late to buy "at" the bottom and how much more will you have wasted in rents?
The key to saving money is doing the math to see what you can buy vs. what you are paying now in rents. And I can recommend several really great lenders to help you figure out the best loan program and what you qualify for and then we can begin the search and find the perfect house.
This week I worked with a client who is a renter. That client will be saving approximately $350 per month by making a purchase and not continuing to pay rents. Oh and we asked the seller to throw in a home warranty and so if something major breaks, that will less out of pocket money too.
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Tammy Lankford, Broker/Owner
Broker License # 169695 Lane Realty License # H-11420
Call me today for all your Lake Sinclair real estate needs.
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