Why waiting to buy a home could cost you a bundle of money

Lets share with you why waiting to buy a home could cost you a bundle of money.

Basically, the 3 reasons why Buyers Need to Buy Right Now

1. Higher Rates are coming!

2. We currently have very Affordable Home Prices!

3. The Tax Incentives are ending soon!

Let’s expand on these points:

1. Why are higher rates coming? The Feds started purchasing Mortgage Backed Securities in September/October 2009 and drove down Mortgage rates.  The Feds will stop buying Mortgage Back Securities on March 31st 2010.  The Feds confirmed their intent to end buying MBS in a press release on January 27, 2010.  The current predictions are showing we will go back to the same rates we were at before the purchasing started.  But Morgan Stanley is even predicting rates as high as 7.5 to 8 before the end of the year.

2. Houston currently has very affordable home pricing as seen by this tracking done by the Houston Association of Realtors.

3. The Tax Incentives will be coming to an end SOON!

-$8000 First Time Home buyer Credit & the $6500 existing Home Buyer Tax Credit Ends April 30th, 2010

This means you must be under Contract by April 30th, 2010 and     close by June 30th, 2010 to be eligible for the credit.

Basically you need to start shopping today because it usually takes over 30 days of looking to find that special home you want to call yours.  Then you need to negotiate and come to agreement on the property or you will have to continue shopping.  This all takes TIME and the clock is ticking!

So how could all of this impact a buyer?

Let’s do a Cost of Waiting Analysis on a 200,000 purchase using an FHA loan for financing over 30 years.

With  Today’s Avg rate being 5.25% vs. after March/31/2010 6.5% vs. Morgan Stanley prediction 7.5% you will notice the “Buy Now” gives you a $296 Monthly savings! What would you do with an extra $296 a month?  Invested it in a college fund? Save it for retirement?

What’s the Total cost over 5 years?

You’re about $6,000 better off in Principal paid down and your Total Cost is $22,548 less than the other options.

So “Buying Now” gets you:

$22,548 in Interest Savings plus the Tax Credit and

$8,000 First time Home Buyer Tax Credit equals

$30,548 is what you can either keep in your wallet or you can “Wait” and lose out on these savings.

If for some reason you’re waiting I hope you would take this information into consideration so that you don’t miss out on this very rare opportunity.  If you have any questions on any of this we will be more than happy to help.  It’s our passion to help you make the best decision when it comes to your next home purchase.