Yep, still on my soapbox. Not only do our words matter as real estate agents when we are choosing to call the largest bedroom in the home a “primary bedroom” or “owner’s
Buy now, or wait?
Dated: May 16 2021
Buying your first home, or selling and buying a new home, is a huge decision! With a decision like this there are so many factors to consider like where you’re at in your job or career, what your family life looks like, and, of course, what your financial situation is.
With the COVID-19 pandemic has come a very unique housing market. Due to the economic toll the pandemic has taken, interest rates are CRAZY low and everyone is taking advantage. Homes are being sold after only being on the market for a few hours and are being sold for well above asking price, in many cases. All of this makes for a very complicated decision for those considering buying and/or selling right now.
Take a look at some of my other posts for thoughts on whether or not you should move based on what’s going on in your life at the moment. As for this post, let’s break down the financial stuff. What you have to consider right now, is how much more you are going to pay for the home you want and whether getting a higher loan at a lower interest rate is going to wind up being less costly for you, or if you’re better off buying at a time when the interest rates are higher and home costs are lower.
For instance, if you are interested in a home with an estimated value of $200,000, right now you might be looking at it costing more like $225,000 (or potentially even more), but you might also be able to get an interest rate of 3% (or less!). So if you get a 30 year mortgage for $200,000 at a 2.75% interest rate, you’re going to end up paying around $294,000 total, over the life of the loan. Alternatively, you could get a 15-year mortgage and end up paying only around $240,000, and really take advantage of the low interest rates. If you choose to wait, and buy later, interest rates are already increasing and could go back up to where they had been, at 4 or 4.5%, but now the home you want doesn’t cost the additional $25,000, so you only take out a loan for $175,000. If that is the case, you would pay around $310,000 for the life of a 30 year loan (at a 4.25% interest rate) or $237,000 for the life of a 15 year loan.
Thanks so much for considering me to help you find your new home! I am an Albuquerque native and know the city inside and out. With a background in wedding sales and planning, I value getting to know ....