How much is your money going to cost you next year?
Whether the price of the home you are looking to buy goes up or down a little bit, the biggest uncertain factor in today's economy is whether interest rates will continue to hold steady. Interest rates are climbing up, but are still very good!
For example: Lets say you are buying a home that costs $250,000. You are going to pay for it with an FHA loan, with a 3% down payment--keeping your out-of-pocket expenses low. Look at the difference between today's common 6.5% interest rate vs. an increase of 1 percent: (insurance & taxes not included)
VS. 
Big difference, huh? Just one simple percentage point might not look so different at first glace, but to think of it another way: you are paying the equivalent of buying a $275,000 home at the same interest rate.
Now does it get a little bit clearer?
With all of the doubts and uncertainty floating around, there are sure to be changes coming in mortgage rates. Why not lock in an interest rate that is good in an historical sense. Since home prices are lower than in the past few years AND interest rates are still good...the time to buy is now!
Kent Simpson
Specializing in Buyer Representation in the Tucson, Arizona real estate market.
"Never forget - Real Estate Is About People"
That is a great point Kent. I have actually wrote about this a couple of times recently. Great post
Thanks for being the first to comment, Anthony. I had this conversation with several of my colleagues yesterday, and thought I should write about it for the public to see.
You are precisely right. This exact point has helped me with clients that keep going back and forth.
Some good points - I read earlier today a similar post about "why in the world would anyone take and ARM right now?"
It's looking like the rates are moving up again...who knows how steady they are! But it's pure speculation to try to "guess" the bottom!
Very important post. If a house is a little cheaper and the interest rates are a little higher. The monthly cost can be a lot higher.
All the best!
Kent,
Crystal clear, my friend! Excellent post.
Mike in Tucson
Zachry - thanks for stopping by...keep making that point!
Bill - why ARM, indeed! I haven't had anyone looking at ARMs this year, but have always had in the back of my mind to caution anyone who does to take a good hard look with their financial consultant also.
Ron - Amen brother, amen!
Kevin - thanks for stopping by. You are right on point!
Mike - thanks for the kind words.
GREAT point...thank you for posting.
Dave
Dave - thank you for taking the time to come by and comment about this issue.